1.1    .................... moves to amend H.F. No. 3648 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2006, section 144.0724, subdivision 7, is amended to
1.4read:
1.5    Subd. 7. Notice of resident reimbursement classification. (a) A facility must elect
1.6between the options in clauses (1) and (2) to provide notice to a resident of the resident's
1.7case mix classification.
1.8    (1) The commissioner of health shall provide to a nursing facility a notice for
1.9each resident of the reimbursement classification established under subdivision 1. The
1.10notice must inform the resident of the classification that was assigned, the opportunity
1.11to review the documentation supporting the classification, the opportunity to obtain
1.12clarification from the commissioner, and the opportunity to request a reconsideration of the
1.13classification. The commissioner must send transmit the notice of resident classification
1.14by first class mail electronic means to the nursing facility. A nursing facility is responsible
1.15for the distribution of the notice to each resident, to the person responsible for the payment
1.16of the resident's nursing home expenses, or to another person designated by the resident.
1.17This notice must be distributed within three working days after the facility's receipt of the
1.18electronic file of notice of case mix classifications from the commissioner of health.
1.19    (2) A facility may choose to provide a classification notice, as prescribed by the
1.20commissioner of health, to a resident upon receipt of the confirmation of the case mix
1.21classification calculated by a facility or a corrected case mix classification as indicated on
1.22the final validation report from the commissioner. A nursing facility is responsible for
1.23the distribution of the notice to each resident, to the person responsible for the payment
1.24of the resident's nursing home expenses, or to another person designated by the resident.
1.25This notice must be distributed within three working days after the facility's receipt of the
1.26validation report from the commissioner. If a facility elects this option, the commissioner
1.27of health shall provide the facility with a list of residents and their case mix classifications
2.1as determined by the commissioner. A nursing facility may make this election to be
2.2effective on the day of implementation of the revised case mix system.
2.3    (3) After implementation of the revised case mix system, a nursing facility shall
2.4elect a notice of resident reimbursement classification procedure as described in clause
2.5(1) or (2) by reporting to the commissioner of health, as prescribed by the commissioner.
2.6The election is effective July 1.
2.7    (b) If a facility submits a correction to the most recent assessment used to establish
2.8a case mix classification conducted under subdivision 3 that results in a change in case
2.9mix classification, the facility shall give written notice to the resident or the resident's
2.10representative about the item that was corrected and the reason for the correction. The
2.11notice of corrected assessment may be provided at the same time that the resident or
2.12resident's representative is provided the resident's corrected notice of classification.

2.13    Sec. 2. Minnesota Statutes 2006, section 144A.073, as amended by Laws 2007, chapter
2.14147, article 7, section 1, is amended to read:
2.15144A.073 EXCEPTIONS TO THE MORATORIUM; REVIEW.
2.16    Subdivision 1. Definitions. For purposes of this section, the following terms have
2.17the meanings given them:
2.18    (a) "Conversion" means the relocation of a nursing home bed from a nursing home
2.19to an attached hospital.
2.20    (b) "Relocation" means the movement of licensed nursing home beds or certified
2.21boarding care beds as permitted under subdivision 4, clause (3), and subdivision 5.
2.22    (c) "Renovation" means extensive remodeling of, or construction of an addition to, a
2.23facility on an existing site an existing facility with a total cost exceeding ten percent of the
2.24appraised value of the facility or $200,000, whichever is less. A renovation may include
2.25the replacement or upgrade of existing mechanical or electrical systems.
2.26    (d) "Replacement" means the demolition, delicensure, reconstruction, or construction
2.27of an addition to all or part of an existing construction of a complete new facility.
2.28    (e) "Addition" means the construction of new space to an existing facility.
2.29    (f) "Upgrading" means a change in the level of licensure of a bed from a boarding
2.30care bed to a nursing home bed in a certified boarding care facility.
2.31    (g) "Phased project" means a proposal that identifies construction occurring with
2.32more than one distinct completion date. To be considered a distinct completion, each phase
2.33must have construction that is ready for resident use, as determined by the commissioner,
2.34that is not dependent on similar commissioner approval for future phases of construction.
2.35The commissioner of human services shall only allow rate adjustments for construction
3.1projects in phases if the proposal from a facility identifies construction in phases and each
3.2phase can be approved for use independent of the other phases.
3.3    Subd. 2. Request for proposals. At the authorization by the legislature of additional
3.4medical assistance expenditures for exceptions to the moratorium on nursing homes,
3.5the commissioner shall publish in the State Register a request for proposals for nursing
3.6home and certified boarding care home projects to be licensed or certified under section
3.7144A.071, subdivision 4a, clause (c) for conversion, relocation, renovation, replacement,
3.8upgrading, or addition. The public notice of this funding and the request for proposals
3.9must specify how the approval criteria will be prioritized by the commissioner. The notice
3.10must describe the information that must accompany a request and state that proposals
3.11must be submitted to the commissioner within 90 150 days of the date of publication. The
3.12notice must include the amount of the legislative appropriation available for the additional
3.13costs to the medical assistance program of projects approved under this section. If no
3.14money is appropriated for a year, the commissioner shall publish a notice to that effect,
3.15and no proposals shall be requested. If money is appropriated, the commissioner shall
3.16initiate the application and review process described in this section at least twice once
3.17each biennium and up to four times each biennium, according to dates established by
3.18rule. Authorized funds shall be allocated proportionally to the number of processes. A
3.19second application and review process must occur if remaining funds are either greater
3.20than $300,000 or more than 50 percent of the baseline appropriation for the biennium.
3.21Authorized funds may be awarded in full in the first review process of the biennium.
3.22Appropriated funds not encumbered by an earlier process within a biennium shall carry
3.23forward to subsequent iterations of the process. Authorization for expenditures does not
3.24carry forward into the following biennium. To be considered for approval, a proposal
3.25must include the following information:
3.26    (1) whether the request is for renovation, replacement, upgrading, conversion,
3.27addition, or relocation;
3.28    (2) a description of the problem problems the project is designed to address;
3.29    (3) a description of the proposed project;
3.30    (4) an analysis of projected costs of the nursing facility proposal, which are not
3.31required to exceed the cost threshold referred to in section 144A.071, subdivision 1, to be
3.32considered under this section proposed project, including:
3.33(i) initial construction and remodeling costs;
3.34(ii) site preparation costs;
3.35(iii) equipment and technology costs;
4.1(iv) financing costs, including the current estimated long-term financing costs of
4.2the proposal, which consists of is to include details of any proposed funding mechanism
4.3already arranged or being considered, including estimates of the amount and sources of
4.4money, reserves if required under the proposed funding mechanism, annual payments
4.5schedule, interest rates, length of term, closing costs and fees, insurance costs, and any
4.6completed marketing study or underwriting review; and
4.7(v) estimated operating costs during the first two years after completion of the
4.8project;.
4.9    (5) for proposals involving replacement of all or part of a facility, the proposed
4.10location of the replacement facility and an estimate of the cost of addressing the problem
4.11through renovation;
4.12    (6) for proposals involving renovation, an estimate of the cost of addressing the
4.13problem through replacement;
4.14    (7) the proposed timetable for commencing construction and completing the project;
4.15    (8) a statement of any licensure or certification issues, such as certification survey
4.16deficiencies;
4.17    (9) the proposed relocation plan for current residents if beds are to be closed so that
4.18the Department of Human Services can estimate the total costs of a proposal according
4.19to section 144A.161; and
4.20    (10) other information required by permanent rule of the commissioner of health
4.21in accordance with subdivisions 4 and 8.
4.22    Subd. 3. Review and approval of proposals. Within the limits of money
4.23specifically appropriated to the medical assistance program for this purpose, the
4.24commissioner of health may grant exceptions to the nursing home licensure or certification
4.25moratorium for proposals that satisfy the requirements of this section. The commissioner
4.26of health shall approve or disapprove a project. The commissioner of health shall base
4.27approvals or disapprovals on a comparison and ranking of proposals using only the
4.28criteria in subdivision 4 and in rules adopted by the commissioner. The cost to the
4.29medical assistance program of the proposals approved must be within the limits of the
4.30appropriations specifically made for this purpose. Approval of a proposal expires 18
4.31months after approval by the commissioner of health unless the facility has commenced
4.32construction as defined in section 144A.071, subdivision 1a, paragraph (d).
4.33    Subd. 3b. Amendments to approved projects. (a) Nursing facilities that have
4.34received approval on or after July 1, 1993, for exceptions to the moratorium on nursing
4.35homes through the process described in this section may request amendments to the
4.36designs of the projects by writing the commissioner within 18 15 months of receiving
5.1approval. Applicants shall submit supporting materials that demonstrate how the amended
5.2projects meet the criteria described in paragraph (b).
5.3    (b) The commissioner shall approve requests for amendments for projects approved
5.4on or after July 1, 1993, according to the following criteria:
5.5    (1) the amended project designs must provide solutions to all of the problems
5.6addressed by the original application that are at least as effective as the original solutions;
5.7    (2) the amended project designs may not reduce the space in each resident's living
5.8area or in the total amount of common space devoted to resident and family uses by
5.9more than five percent;
5.10    (3) the costs recognized for reimbursement of amended project designs shall be the
5.11threshold amount of the original proposal as identified according to section 144A.071,
5.12subdivision 2 , except under conditions described in clause (4); and
5.13    (4) total costs up to ten percent greater than the cost identified in clause (3) may be
5.14recognized for reimbursement if the proposer can document that one of the following
5.15circumstances is true:
5.16    (i) changes are needed due to a natural disaster;
5.17    (ii) conditions that affect the safety or durability of the project that could not have
5.18reasonably been known prior to approval are discovered;
5.19    (iii) state or federal law require changes in project design; or
5.20    (iv) documentable circumstances occur that are beyond the control of the owner
5.21and require changes in the design.
5.22    (c) Approval of a request for an amendment does not alter the expiration of approval
5.23of the project according to subdivision 3.
5.24    Subd. 3c. Cost neutral relocation projects. (a) Notwithstanding subdivision 3, the
5.25commissioner may at any time accept proposals, or amendments to proposals previously
5.26approved under this section, for relocations that are cost neutral with respect to state costs
5.27as defined in section 144A.071, subdivision 5a. The commissioner, in consultation with
5.28the commissioner of human services, shall evaluate proposals according to subdivision 4,
5.29clauses (1), (2), and (3), and (9) and other criteria established in rule. The commissioner
5.30shall approve or disapprove a project within 90 days. Proposals and amendments approved
5.31under this subdivision are not subject to the six-mile limit in subdivision 5, paragraph (e).
5.32    (b) For the purposes of paragraph (a), cost neutrality shall be measured over the first
5.33three 12-month periods of operation after completion of the project.
5.34    Subd. 3d. Project amendment authorized. Notwithstanding the provisions of
5.35subdivision 3b:
6.1    (1) the commissioner may approve a request by a nursing facility located in the city
6.2of Duluth with 48 licensed beds as of January 1, 2005, that received approval under this
6.3section in 2002 for a moratorium exception project for amendment of the project design
6.4that:
6.5    (i) reduces the total amount of common space devoted to resident and family uses by
6.6more than five percent if the total amount of common space in the facility, including that
6.7added by the project, is at least 175 percent of the state requirement for common space; and
6.8    (ii) reduces the space for no more than two residents' living areas by increasing the
6.9size of a majority of the single-bed rooms from the size in the project design as originally
6.10approved and converting two single-bed rooms in the project design as originally
6.11approved to one semi-private room; and
6.12    (2) the commissioner may approve a request by a nursing facility located in the city
6.13of Duluth with 129 licensed beds as of January 1, 2005, that received approval under this
6.14section in 2002 for a moratorium exception project for amendment of the project design
6.15that:
6.16    (i) reduces the total amount of common space devoted to resident and family uses by
6.17more than five percent if the total amount of common space in the facility, including that
6.18added by the project, is at least 175 percent of the state requirement for common space; and
6.19    (ii) reduces the space for no more than four residents' living areas by increasing the
6.20size of a majority of the single-bed rooms from the size in the project design as originally
6.21approved and converting four single-bed rooms in the project design as originally
6.22approved to two semi-private rooms; and
6.23    (3) the amended project designs in clauses (1) and (2) must provide solutions to all
6.24of the problems addressed by the original application that are at least as effective as the
6.25original solutions.
6.26    Subd. 4. Criteria for review. The following criteria shall be used in a consistent
6.27manner to compare, evaluate, and rank all proposals submitted. Except for the criteria
6.28specified in clause (3), the application of criteria listed under this subdivision shall not
6.29reflect any distinction based on the geographic location of the proposed project:
6.30    (1) the extent to which the proposal furthers state long-term care goals, including
6.31the goal of enhancing the availability and use of alternative care services and the goal of
6.32reducing the number of long-term care resident rooms with more than two beds;
6.33    (2) the proposal's long-term effects on state costs including the cost estimate of the
6.34project according to section 144A.071, subdivision 5a;
6.35    (3) the extent to which the proposal promotes equitable access to long-term care
6.36services in nursing homes through redistribution of the nursing home bed supply, as
7.1measured by the number of beds relative to the population 85 or older, projected to
7.2the year 2000 by the state demographer, and according to items (i) to (iv): using data
7.3published according to requirements in section 144A.351;
7.4    (i) reduce beds in counties where the supply is high, relative to the statewide mean,
7.5and increase beds in counties where the supply is low, relative to the statewide mean;
7.6    (ii) adjust the bed supply so as to create the greatest benefits in improving the
7.7distribution of beds;
7.8    (iii) adjust the existing bed supply in counties so that the bed supply in a county
7.9moves toward the statewide mean; and
7.10    (iv) adjust the existing bed supply so that the distribution of beds as projected for the
7.11year 2020 would be consistent with projected need, based on the methodology outlined in
7.12the Interagency Long-Term Care Committee's nursing home bed distribution study;
7.13    (4) the extent to which the project improves conditions that affect the health or
7.14safety of residents, such as narrow corridors, narrow door frames, unenclosed fire exits,
7.15and wood frame construction, and similar provisions contained in fire and life safety
7.16codes and licensure and certification rules;
7.17    (5) the extent to which the project improves conditions that affect the comfort or
7.18quality of life of residents in a facility or the ability of the facility to provide efficient
7.19care, such as a relatively high number of residents in a room; inadequate lighting or
7.20ventilation; poor access to bathing or toilet facilities; a lack of available ancillary space for
7.21dining rooms, day rooms, or rooms used for other activities; problems relating to heating,
7.22cooling, or energy efficiency; inefficient location of nursing stations; narrow corridors; or
7.23other provisions contained in the licensure and certification rules;
7.24    (6) the extent to which the applicant demonstrates the delivery of quality care, as
7.25defined in state and federal statutes and rules, to residents as evidenced by the two most
7.26recent state agency certification surveys and the applicants' response to those surveys;
7.27    (7) the extent to which the project removes the need for waivers or variances
7.28previously granted by either the licensing agency, certifying agency, fire marshal, or
7.29local government entity;
7.30    (8) the extent to which the project increases the number of private or single bed
7.31rooms;
7.32    (9) the extent to which the applicant demonstrates the continuing need for nursing
7.33facility care in the community and adjacent communities; and
7.34    (10) other factors that may be developed in permanent rule by the commissioner of
7.35health that evaluate and assess how the proposed project will further promote or protect
7.36the health, safety, comfort, treatment, or well-being of the facility's residents.
8.1    Subd. 5. Replacement restrictions. (a) Proposals submitted or approved under this
8.2section involving replacement must provide for replacement of the facility on the existing
8.3site except as allowed in this subdivision.
8.4    (b) Facilities located in a metropolitan statistical area other than the Minneapolis-St.
8.5Paul seven-county metropolitan area may relocate to a site within the same census tract or
8.6a contiguous census tract.
8.7    (c) Facilities located in the Minneapolis-St. Paul seven-county metropolitan area
8.8may relocate to a site within the same or contiguous health planning area as adopted in
8.9March 1982 by the Metropolitan Council.
8.10    (d) Facilities located outside a metropolitan statistical area may relocate to a site
8.11within the same city or township, or within a contiguous township.
8.12    (e) A facility relocated to a different site under paragraph (b), (c), or (d) must not be
8.13relocated to a site more than six miles from the existing site.
8.14    (f) The relocation of part of an existing first facility to a second location, under
8.15paragraphs (d) and (e), may include the relocation to the second location of up to four
8.16beds from part of an existing third facility located in a township contiguous to the location
8.17of the first facility. The six-mile limit in paragraph (e) does not apply to this relocation
8.18from the third facility.
8.19    (g) For proposals approved on January 13, 1994, under this section involving the
8.20replacement of 102 licensed and certified beds, the relocation of the existing first facility to
8.21the new location under paragraphs (d) and (e) may include the relocation of up to 75 beds
8.22of the existing facility. The six-mile limit in paragraph (e) does not apply to this relocation.
8.23    Subd. 6. Conversion restrictions. Proposals submitted or approved under this
8.24section involving conversion must satisfy the following conditions:
8.25    (a) Conversion is limited to a total of five beds.
8.26    (b) An equivalent number of hospital beds must be delicensed.
8.27    (c) The average occupancy rate in the existing nursing home beds must be greater
8.28than 96 percent according to the most recent annual statistical and cost report of the
8.29Department of Health Human Services.
8.30    (d) The cost of remodeling the hospital rooms to meet current nursing home
8.31construction standards must not exceed ten percent of the appraised value of the nursing
8.32home or $200,000, whichever is less.
8.33    (e) The conversion must not result in an increase in operating costs.
8.34    Subd. 7. Upgrading restrictions. Proposals submitted or approved under this
8.35section involving upgrading must satisfy the following conditions:
9.1    (a) The facility must meet minimum nursing home care standards licensure
9.2requirements.
9.3    (b) If beds are upgraded to nursing home beds, the number of boarding care beds in
9.4a facility must not increase in the future.
9.5    (c) The average occupancy rate in the existing nursing home beds in an attached
9.6facility must be greater than 96 percent according to the most recent annual statistical
9.7report of the Department of Health.
9.8    Subd. 8. Rulemaking. The commissioner of health shall adopt rules to implement
9.9this section. The permanent rules must be in accordance with and implement only the
9.10criteria listed in this section. The authority to adopt permanent rules continues until July
9.111, 1996.
9.12    Subd. 9. Budget request. The commissioner of human services, in consultation
9.13with the commissioner of finance, shall include in each biennial budget request a line
9.14item for the nursing home moratorium exception process. If the commissioner of human
9.15services does not request funding for this item, the commissioner of human services must
9.16justify the decision in the budget pages.
9.17    Subd. 10. Extension of approval of moratorium exception. Notwithstanding
9.18subdivision 3, the commissioner of health shall extend project approval for an additional
9.1936 months for any proposed exception to the nursing home licensure and certification
9.20moratorium if the proposal was approved under this section between July 1, 2001, and
9.21June 30, 2003.
9.22    Subd. 11. Funding from expired and canceled proposals. The commissioner shall
9.23monitor the status of projects approved under this section to identify, in consultation
9.24with each facility with an approved project, if projects will be canceled or will expire.
9.25For projects that have been canceled or have expired, if originally approved after June 30,
9.262001, the commissioner's approval authority for the estimated annual state cost to medical
9.27assistance shall carry forward and shall be available for the issuance of a new moratorium
9.28round later in that fiscal year or in either of the following two fiscal years.

9.29    Sec. 3. Minnesota Statutes 2006, section 144A.11, subdivision 2, is amended to read:
9.30    Subd. 2. Mandatory proceedings. (a) The commissioner of health shall initiate
9.31proceedings within 60 days of notification to suspend or revoke a nursing home license
9.32or shall refuse to renew a license if within the preceding two years the nursing home has
9.33incurred the following number of uncorrected or repeated violations:
9.34    (1) two or more uncorrected violations or one or more repeated violations which
9.35created an imminent risk to direct resident care or safety; or
10.1    (2) four or more uncorrected violations or two or more repeated violations of any
10.2nature for which the fines are in the four highest daily fine categories prescribed in rule.
10.3    (b) Notwithstanding paragraph (a), the commissioner is not required to revoke,
10.4suspend, or refuse to renew a facility's license if the facility corrects the violation.
10.5EFFECTIVE DATE.This section is effective the day following final enactment."
10.6Amend the title accordingly