1.1 A bill for an act
1.2 relating to health; modifying case mix reimbursement for federal conformity;
1.3 amending Minnesota Statutes 2024, section 144.0724, subdivisions 2, 3a, 4, 7, 9.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2024, section 144.0724, subdivision 2, is amended to read:
1.6 Subd. 2.Definitions.For purposes of this section, the following terms have the meanings
1.7given.
1.8 (a) "Assessment reference date" or "ARD" means the specific end point for look-back
1.9periods in the MDS assessment process. This look-back period is also called the observation
1.10or assessment period.
1.11 (b) "Case mix index" means the weighting factors assigned to the case mix reimbursement
1.12classifications determined by an assessment.
1.13 (c) "Index maximization" means classifying a resident who could be assigned to more
1.14than one category, to the category with the highest case mix index.
1.15 (d) "Minimum Data Set" or "MDS" means a core set of screening, clinical assessment,
1.16and functional status elements, that include common definitions and coding categories
1.17specified by the Centers for Medicare and Medicaid Services and designated by the
1.18Department of Health.
1.19 (e) "Representative" means a person who is the resident's guardian or conservator, the
1.20person authorized to pay the nursing home expenses of the resident, a representative of the
1.21Office of Ombudsman for Long-Term Care whose assistance has been requested, or any
1.22other individual designated by the resident.
1Section 1.
REVISOR EB/MI 25-0030701/13/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 2756
NINETY-FOURTH SESSION
Authored by Bierman03/24/2025
The bill was read for the first time and referred to the Committee on Health Finance and Policy 2.1 (f) "Activities of daily living" or "ADL" includes personal hygiene, dressing, bathing,
2.2transferring, bed mobility, locomotion, eating, and toileting.
2.3 (g) "Patient Driven Payment Model" or "PDPM" means a case mix classification system
2.4for residents in nursing facilities based on the resident's condition, diagnosis, and the care
2.5the resident is receiving based on data supplied in the facility's MDS for assessments with
2.6an ARD on or after October 1, 2025.
2.7 (g) (h) "Nursing facility level of care determination" means the assessment process that
2.8results in a determination of a resident's or prospective resident's need for nursing facility
2.9level of care as established in subdivision 11 for purposes of medical assistance payment
2.10of long-term care services for:
2.11 (1) nursing facility services under chapter 256R;
2.12 (2) elderly waiver services under chapter 256S;
2.13 (3) CADI and BI waiver services under section 256B.49; and
2.14 (4) state payment of alternative care services under section 256B.0913.
2.15 (i) "Resource utilization groups" or "RUG" means a system for grouping a nursing
2.16facility's residents according to the resident's clinical and functional status identified in data
2.17supplied by the facility's minimum data set with an ARD on or prior to September 30, 2025.
2.18 Sec. 2. Minnesota Statutes 2024, section 144.0724, subdivision 3a, is amended to read:
2.19 Subd. 3a.Resident case mix reimbursement classifications.(a) Resident case mix
2.20reimbursement classifications shall be based on the Minimum Data Set, version 3.0
2.21assessment instrument, or its successor version mandated by the Centers for Medicare and
2.22Medicaid Services that nursing facilities are required to complete for all residents. Case
2.23mix reimbursement classifications shall also be based on assessments required under
2.24subdivision 4. Assessments must be completed according to the Long Term Care Facility
2.25Resident Assessment Instrument User's Manual Version 3.0 or a successor manual issued
2.26by the Centers for Medicare and Medicaid Services. On or before September 30, 2025, the
2.27optional state assessment must be completed according to the OSA Manual Version 1.0 v.2.
2.28 (b) Each resident must be classified based on the information from the Minimum Data
2.29Set according to the general categories issued by the Minnesota Department of Health,
2.30utilized for reimbursement purposes.
2Sec. 2.
REVISOR EB/MI 25-0030701/13/25 3.1 Sec. 3. Minnesota Statutes 2024, section 144.0724, subdivision 4, is amended to read:
3.2 Subd. 4.Resident assessment schedule.(a) A facility must conduct and electronically
3.3submit to the federal database MDS assessments that conform with the assessment schedule
3.4defined by the Long Term Care Facility Resident Assessment Instrument User's Manual,
3.5version 3.0, or its successor issued by the Centers for Medicare and Medicaid Services. The
3.6commissioner of health may substitute successor manuals or question and answer documents
3.7published by the United States Department of Health and Human Services, Centers for
3.8Medicare and Medicaid Services, to replace or supplement the current version of the manual
3.9or document.
3.10 (b) The assessments required under the Omnibus Budget Reconciliation Act of 1987
3.11(OBRA) used to determine a case mix reimbursement classification include:
3.12 (1) a new admission comprehensive assessment, which must have an assessment reference
3.13date (ARD) within 14 calendar days after admission, excluding readmissions;
3.14 (2) an annual comprehensive assessment, which must have an ARD within 92 days of
3.15a previous quarterly review assessment or a previous comprehensive assessment, which
3.16must occur at least once every 366 days;
3.17 (3) a significant change in status comprehensive assessment, which must have an ARD
3.18within 14 days after the facility determines, or should have determined, that there has been
3.19a significant change in the resident's physical or mental condition, whether an improvement
3.20or a decline, and regardless of the amount of time since the last comprehensive assessment
3.21or quarterly review assessment. Effective October 1, 2025, a significant change in status
3.22assessment is also required when isolation for an infectious disease has ended. If isolation
3.23was not coded on the most recent OBRA assessment completed, then the significant change
3.24in status assessment is not required. The ARD of this assessment must be set on day 15 after
3.25isolation has ended;
3.26 (4) a quarterly review assessment must have an ARD within 92 days of the ARD of the
3.27previous quarterly review assessment or a previous comprehensive assessment;
3.28 (5) any significant correction to a prior comprehensive assessment, if the assessment
3.29being corrected is the current one being used for reimbursement classification;
3.30 (6) any significant correction to a prior quarterly review assessment, if the assessment
3.31being corrected is the current one being used for reimbursement classification; and
3.32 (7) any modifications to the most recent assessments under clauses (1) to (6).
3Sec. 3.
REVISOR EB/MI 25-0030701/13/25 4.1 (c) On or before September 30, 2025, the optional state assessment must accompany all
4.2OBRA assessments. The optional state assessment is also required to determine
4.3reimbursement when:
4.4 (1) all speech, occupational, and physical therapies have ended. If the most recent optional
4.5state assessment completed does not result in a rehabilitation case mix reimbursement
4.6classification, then the optional state assessment is not required. The ARD of this assessment
4.7must be set on day eight after all therapy services have ended; and
4.8 (2) isolation for an infectious disease has ended. If isolation was not coded on the most
4.9recent optional state assessment completed, then the optional state assessment is not required.
4.10The ARD of this assessment must be set on day 15 after isolation has ended.
4.11 (d) In addition to the assessments listed in paragraphs (b) and (c), the assessments used
4.12to determine nursing facility level of care include the following:
4.13 (1) preadmission screening completed under section 256.975, subdivisions 7a to 7c, by
4.14the Senior LinkAge Line or other organization under contract with the Minnesota Board on
4.15Aging; and
4.16 (2) a nursing facility level of care determination as provided for under section 256B.0911,
4.17subdivision 26, as part of a face-to-face long-term care consultation assessment completed
4.18under section 256B.0911, by a county, tribe, or managed care organization under contract
4.19with the Department of Human Services.
4.20 Sec. 4. Minnesota Statutes 2024, section 144.0724, subdivision 7, is amended to read:
4.21 Subd. 7.Notice of resident case mix reimbursement classification.(a) The
4.22commissioner of health shall provide to a nursing facility a notice for each resident of the
4.23classification established under subdivision 1. The notice must inform the resident of the
4.24case mix reimbursement classification assigned, the opportunity to review the documentation
4.25supporting the classification, the opportunity to obtain clarification from the commissioner,
4.26the opportunity to request a reconsideration of the classification, and the address and
4.27telephone number of the Office of Ombudsman for Long-Term Care. The commissioner
4.28must transmit the notice of resident classification by electronic means to the nursing facility.
4.29The nursing facility is responsible for the distribution of the notice to each resident or the
4.30resident's representative. This notice must be distributed within three business days after
4.31the facility's receipt.
4.32 (b) If a facility submits a modified assessment resulting in a change in the case mix
4.33reimbursement classification, the facility must provide a written notice to the resident or
4Sec. 4.
REVISOR EB/MI 25-0030701/13/25 5.1the resident's representative regarding the item or items that were modified and the reason
5.2for the modifications. The written notice must be provided within three business days after
5.3distribution of the resident case mix reimbursement classification notice.
5.4 Sec. 5. Minnesota Statutes 2024, section 144.0724, subdivision 9, is amended to read:
5.5 Subd. 9.Audit authority.(a) The commissioner shall audit the accuracy of resident
5.6assessments performed under section 256R.17 through any of the following: desk audits;
5.7on-site review of residents and their records; and interviews with staff, residents, or residents'
5.8families. The commissioner shall reclassify a resident if the commissioner determines that
5.9the resident was incorrectly classified.
5.10 (b) The commissioner is authorized to conduct on-site audits on an unannounced basis.
5.11 (c) A facility must grant the commissioner access to examine the medical records relating
5.12to the resident assessments selected for audit under this subdivision. The commissioner may
5.13also observe and speak to facility staff and residents.
5.14 (d) The commissioner shall consider documentation under the time frames for coding
5.15items on the minimum data set as set out in the Long-Term Care Facility Resident Assessment
5.16Instrument User's Manual or on or before September 30, 2025, the OSA Manual version
5.171.0 v.2 published by the Centers for Medicare and Medicaid Services.
5.18 (e) The commissioner shall develop an audit selection procedure that includes the
5.19following factors:
5.20 (1) Each facility shall be audited annually. If a facility has two successive audits in which
5.21the percentage of change is five percent or less and the facility has not been the subject of
5.22a special audit in the past 36 months, the facility may be audited biannually. A stratified
5.23sample of 15 percent, with a minimum of ten assessments, of the most current assessments
5.24shall be selected for audit. If more than 20 percent of the case mix reimbursement
5.25classifications are changed as a result of the audit, the audit shall be expanded to a second
5.2615 percent sample, with a minimum of ten assessments. If the total change between the first
5.27and second samples is 35 percent or greater, the commissioner may expand the audit to all
5.28of the remaining assessments.
5.29 (2) If a facility qualifies for an expanded audit, the commissioner may audit the facility
5.30again within six months. If a facility has two expanded audits within a 24-month period,
5.31that facility will be audited at least every six months for the next 18 months.
5Sec. 5.
REVISOR EB/MI 25-0030701/13/25 6.1 (3) The commissioner may conduct special audits if the commissioner determines that
6.2circumstances exist that could alter or affect the validity of case mix reimbursement
6.3classifications of residents. These circumstances include, but are not limited to, the following:
6.4 (i) frequent changes in the administration or management of the facility;
6.5 (ii) an unusually high percentage of residents in a specific case mix reimbursement
6.6classification;
6.7 (iii) a high frequency in the number of reconsideration requests received from a facility;
6.8 (iv) frequent adjustments of case mix reimbursement classifications as the result of
6.9reconsiderations or audits;
6.10 (v) a criminal indictment alleging provider fraud;
6.11 (vi) other similar factors that relate to a facility's ability to conduct accurate assessments;
6.12 (vii) an atypical pattern of scoring minimum data set items;
6.13 (viii) nonsubmission of assessments;
6.14 (ix) late submission of assessments; or
6.15 (x) a previous history of audit changes of 35 percent or greater.
6.16 (f) If the audit results in a case mix reimbursement classification change, the
6.17commissioner must transmit the audit classification notice by electronic means to the nursing
6.18facility within 15 business days of completing an audit. The nursing facility is responsible
6.19for distribution of the notice to each resident or the resident's representative. This notice
6.20must be distributed by the nursing facility within three business days after receipt. The
6.21notice must inform the resident of the case mix reimbursement classification assigned, the
6.22opportunity to review the documentation supporting the classification, the opportunity to
6.23obtain clarification from the commissioner, the opportunity to request a reconsideration of
6.24the classification, and the address and telephone number of the Office of Ombudsman for
6.25Long-Term Care.
6Sec. 5.
REVISOR EB/MI 25-0030701/13/25