1.1.................... moves to amend H.F. No. 828 as follows:
1.2Page 1, after line 4, insert:

1.3    "Section 1. Minnesota Statutes 2010, section 256B.434, subdivision 4, is amended to
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 management and
1.19budget's national economic consultant, as forecasted in the fourth quarter of the calendar
1.20year preceding the rate year. The inflation adjustment must be based on the 12-month
1.21period from the midpoint of the previous rate year to the midpoint of the rate year for
1.22which the rate is being determined. For the rate years beginning on July 1, 1999, July 1,
1.232000, July 1, 2001, July 1, 2002, July 1, 2003, July 1, 2004, July 1, 2005, July 1, 2006,
1.24July 1, 2007, July 1, 2008, October 1, 2009, and October 1, 2010, October 1, 2011, and
1.25October 1, 2012. this paragraph shall apply only to the property-related payment rate,
1.26except that adjustments to include the cost of any increase in Health Department licensing
1.27fees taking effect on or after July 1, 2001, shall be provided. For the rate years beginning
2.1on October 1, 2011, and October 1, 2012, the rate adjustment under this paragraph shall
2.2be suspended. Beginning in 2005, adjustment to the property payment rate under this
2.3section and section 256B.431 shall be effective on October 1. In determining the amount
2.4of the property-related payment rate adjustment under this paragraph, the commissioner
2.5shall determine the proportion of the facility's rates that are property-related based on the
2.6facility's most recent cost report.
2.7    (d) The commissioner shall develop additional incentive-based payments of up to
2.8five percent above a facility's operating payment rate for achieving outcomes specified
2.9in a contract. The commissioner may solicit contract amendments and implement those
2.10which, on a competitive basis, best meet the state's policy objectives. The commissioner
2.11shall limit the amount of any incentive payment and the number of contract amendments
2.12under this paragraph to operate the incentive payments within funds appropriated for this
2.13purpose. The contract amendments may specify various levels of payment for various
2.14levels of performance. Incentive payments to facilities under this paragraph may be in the
2.15form of time-limited rate adjustments or onetime supplemental payments. In establishing
2.16the specified outcomes and related criteria, the commissioner shall consider the following
2.17state policy objectives:
2.18    (1) successful diversion or discharge of residents to the residents' prior home or other
2.19community-based alternatives;
2.20    (2) adoption of new technology to improve quality or efficiency;
2.21    (3) improved quality as measured in the Nursing Home Report Card;
2.22    (4) reduced acute care costs; and
2.23    (5) any additional outcomes proposed by a nursing facility that the commissioner
2.24finds desirable.
2.25    (e) Notwithstanding the threshold in section 256B.431, subdivision 16, facilities that
2.26take action to come into compliance with existing or pending requirements of the life
2.27safety code provisions or federal regulations governing sprinkler systems must receive
2.28reimbursement for the costs associated with compliance if all of the following conditions
2.29are met:
2.30    (1) the expenses associated with compliance occurred on or after January 1, 2005,
2.31and before December 31, 2008;
2.32    (2) the costs were not otherwise reimbursed under subdivision 4f or section
2.33144A.071 or 144A.073; and
2.34    (3) the total allowable costs reported under this paragraph are less than the minimum
2.35threshold established under section 256B.431, subdivision 15, paragraph (e), and
2.36subdivision 16.
3.1The commissioner shall use money appropriated for this purpose to provide to qualifying
3.2nursing facilities a rate adjustment beginning October 1, 2007, and ending September 30,
3.32008. Nursing facilities that have spent money or anticipate the need to spend money
3.4to satisfy the most recent life safety code requirements by (1) installing a sprinkler
3.5system or (2) replacing all or portions of an existing sprinkler system may submit to the
3.6commissioner by June 30, 2007, on a form provided by the commissioner the actual
3.7costs of a completed project or the estimated costs, based on a project bid, of a planned
3.8project. The commissioner shall calculate a rate adjustment equal to the allowable
3.9costs of the project divided by the resident days reported for the report year ending
3.10September 30, 2006. If the costs from all projects exceed the appropriation for this
3.11purpose, the commissioner shall allocate the money appropriated on a pro rata basis
3.12to the qualifying facilities by reducing the rate adjustment determined for each facility
3.13by an equal percentage. Facilities that used estimated costs when requesting the rate
3.14adjustment shall report to the commissioner by January 31, 2009, on the use of this
3.15money on a form provided by the commissioner. If the nursing facility fails to provide
3.16the report, the commissioner shall recoup the money paid to the facility for this purpose.
3.17If the facility reports expenditures allowable under this subdivision that are less than
3.18the amount received in the facility's annualized rate adjustment, the commissioner shall
3.19recoup the difference.

3.20    Sec. 2. Minnesota Statutes 2010, section 256B.441, is amended by adding a
3.21subdivision to read:
3.22    Subd. 60. Rate increase for low-rate facilities. (a) Effective October 1, 2011,
3.23the commissioner shall adjust the operating payment rates of a nursing facility whose
3.24operating payment rate on September 30, 2011, is greater than the 95th percentile of all
3.25nursing facilities operating payment rates. The commissioner shall:
3.26(1) array all operating payment rates in effect on September 30, 2011, at a case-mix
3.27weight equal to 1.00 (DDF) from lowest to highest;
3.28(2) determine the 95th percentile of the array in clause (1);
3.29(3) compute a reduction amount if a facility's amount in clause (1) is greater than the
3.30amount computed in clause (2) by subtracting a facility's DDF rate in clause (1) from the
3.31amount computed in clause (2);
3.32(4) compute the portion of each facility's DDF operating payment rate that is the
3.33direct care per diem based on the rates in effect on September 30, 2011; and
3.34(5) determine the change for all other case-mix levels, by multiplying the amount in
3.35clause (3) by the percentage in clause (4) and by the corresponding case-mix weight for
4.1each care level. Add to this product the non-direct care per diem portion of the amount
4.2in clause (3).
4.3(b) The total amount to be saved by the rate reductions will be computed. The
4.4commissioner shall:
4.5(1) for each facility receiving a rate change in paragraph (a), multiply each case-mix
4.6level's rate change in paragraph (a), clause (5), by the corresponding case-mix resident
4.7days from the most recent cost report that has been desk audited; and
4.8(2) sum all the products computed in clause (1).
4.9(c) The amount of total payment reductions computed in paragraph (b), clause
4.10(2), shall be distributed to the facilities with the lowest DDF operating payment rates
4.11determined in paragraph (a), clause (1). The commissioner shall:
4.12(1) start with the facility or facilities with the lowest DDF operating payment rate
4.13and compute the amount of a rate adjustment needed to make the DDF rate equal to the
4.14DDF of the facility directly below it in the array;
4.15(2) compute the rate increases for the other case-mix levels using the amount
4.16computed in clause (1), and the process stated in paragraph (a), clauses (4) and (5);
4.17(3) compute the total amount the lowest facilities will receive using the process
4.18described in paragraph (b);
4.19(4) compute the running total to be spent at all facilities receiving an increase under
4.20this paragraph by summing each facility's amount computed in clause (3); and
4.21(5) repeat the process in clauses (1) to (4) as long as the amount in clause (4) does
4.22not exceed the amount in paragraph (b), clause (2)."
4.23Renumber the sections in sequence and correct the internal references
4.24Amend the title accordingly