Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF1725 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to human services; modifying elderly waiver rates and nursing facility
3	3	1.3 reimbursement rates; amending Minnesota Statutes 2024, sections 256R.02,
4	4	1.4 subdivision 19, by adding a subdivision; 256R.23, subdivisions 2, 3; 256R.24,
5	5	1.5 subdivision 1; 256R.25; 256S.211, subdivisions 1, 2; 256S.213, subdivision 1;
6	6	1.6 proposing coding for new law in Minnesota Statutes, chapter 256R.
7	7	1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
8	8	1.8 Section 1. Minnesota Statutes 2024, section 256R.02, subdivision 19, is amended to read:
9	9	1.9 Subd. 19.External fixed costs."External fixed costs" means costs related to the nursing
10	10	1.10home surcharge under section 256.9657, subdivision 1; licensure fees under section 144.122;
11	11	1.11family advisory council fee under section 144A.33; scholarships under section 256R.37;
12	12	1.12planned closure rate adjustments under section 256R.40; consolidation rate adjustments
13	13	1.13under section 144A.071, subdivisions 4c, paragraph (a), clauses (5) and (6), and 4d;
14	14	1.14single-bed room incentives under section 256R.41; property taxes, special assessments, and
15	15	1.15payments in lieu of taxes; employer health insurance costs; quality improvement incentive
16	16	1.16payment rate adjustments under section 256R.39; performance-based incentive payments
17	17	1.17under section 256R.38; special dietary needs under section 256R.51; Public Employees
18	18	1.18Retirement Association employer costs; and border city rate adjustments under section
19	19	1.19256R.481; and the rate adjustment for nursing home wage standards under section 256R.495.
20	20	1.20 EFFECTIVE DATE.This section is effective January 1, 2026, or upon federal approval,
21	21	1.21whichever is later, and applies retroactively to the rate year beginning January 1, 2026. The
22	22	1.22commissioner of human services shall notify the revisor of statutes when federal approval
23	23	1.23is obtained.
24	24	1Section 1.
25	25	25-01989 as introduced01/28/25 REVISOR AGW/LJ
26	26	SENATE
27	27	STATE OF MINNESOTA
28	28	S.F. No. 1725NINETY-FOURTH SESSION
29	29	(SENATE AUTHORS: HOFFMAN and Utke)
30	30	OFFICIAL STATUSD-PGDATE
31	31	Introduction and first reading02/20/2025
32	32	Referred to Human Services 2.1 Sec. 2. Minnesota Statutes 2024, section 256R.02, is amended by adding a subdivision to
33	33	2.2read:
34	34	2.3 Subd. 25b.Known cost change factor."Known cost change factor" means 1.00 plus
35	35	2.4the average amount of increase in minimum wages for nursing home employees approved
36	36	2.5by the Nursing Home Workforce Standards Board established under section 181.212 and
37	37	2.6taking effect within the previous 12 months.
38	38	2.7 EFFECTIVE DATE.This section is effective January 1, 2027, or upon federal approval,
39	39	2.8whichever is later, and applies retroactively to the rate year beginning January 1, 2027. The
40	40	2.9commissioner of human services shall notify the revisor of statutes when federal approval
41	41	2.10is obtained.
42	42	2.11 Sec. 3. Minnesota Statutes 2024, section 256R.23, subdivision 2, is amended to read:
43	43	2.12 Subd. 2.Calculation of direct care cost per standardized day.Each facility's direct
44	44	2.13care cost per standardized day is calculated as follows: (1) multiply the facility's direct care
45	45	2.14costs divided and the known cost change factor; and (2) divide the result of clause (1) by
46	46	2.15the sum of the facility's standardized days. A facility's direct care cost per standardized day
47	47	2.16is the facility's cost per day for direct care services associated with a case mix index of 1.00.
48	48	2.17 EFFECTIVE DATE.This section is effective January 1, 2027, or upon federal approval,
49	49	2.18whichever is later, and applies retroactively to the rate year beginning January 1, 2027. The
50	50	2.19commissioner of human services shall notify the revisor of statutes when federal approval
51	51	2.20is obtained.
52	52	2.21 Sec. 4. Minnesota Statutes 2024, section 256R.23, subdivision 3, is amended to read:
53	53	2.22 Subd. 3.Calculation of other care-related cost per resident day.Each facility's other
54	54	2.23care-related cost per resident day is its calculated as follows:
55	55	2.24 (1) multiply the facility's other care-related costs, divided and the known cost change
56	56	2.25factor; and
57	57	2.26 (2) divide the result of clause (1) by the sum of the facility's resident days.
58	58	2.27 EFFECTIVE DATE.This section is effective January 1, 2027, or upon federal approval,
59	59	2.28whichever is later, and applies retroactively to the rate year beginning January 1, 2027. The
60	60	2.29commissioner of human services shall notify the revisor of statutes when federal approval
61	61	2.30is obtained.
62	62	2Sec. 4.
63	63	25-01989 as introduced01/28/25 REVISOR AGW/LJ 3.1 Sec. 5. Minnesota Statutes 2024, section 256R.24, subdivision 1, is amended to read:
64	64	3.2 Subdivision 1.Determination of other operating cost per day.Each facility's other
65	65	3.3operating cost per day is its calculated as follows:
66	66	3.4 (1) multiply the facility's other operating costs divided and the known cost change factor;
67	67	3.5and
68	68	3.6 (2) divide the result of clause (1) by the sum of the facility's resident days.
69	69	3.7 EFFECTIVE DATE.This section is effective January 1, 2027, or upon federal approval,
70	70	3.8whichever is later, and applies retroactively to the rate year beginning January 1, 2027. The
71	71	3.9commissioner of human services shall notify the revisor of statutes when federal approval
72	72	3.10is obtained.
73	73	3.11 Sec. 6. Minnesota Statutes 2024, section 256R.25, is amended to read:
74	74	3.12 256R.25 EXTERNAL FIXED COSTS PAYMENT RATE.
75	75	3.13 (a) The payment rate for external fixed costs is the sum of the amounts in paragraphs
76	76	3.14(b) to (p) (q).
77	77	3.15 (b) For a facility licensed as a nursing home, the portion related to the provider surcharge
78	78	3.16under section 256.9657 is equal to $8.86 per resident day. For a facility licensed as both a
79	79	3.17nursing home and a boarding care home, the portion related to the provider surcharge under
80	80	3.18section 256.9657 is equal to $8.86 per resident day multiplied by the result of its number
81	81	3.19of nursing home beds divided by its total number of licensed beds.
82	82	3.20 (c) The portion related to the licensure fee under section 144.122, paragraph (d), is the
83	83	3.21amount of the fee divided by the sum of the facility's resident days.
84	84	3.22 (d) The portion related to development and education of resident and family advisory
85	85	3.23councils under section 144A.33 is $5 per resident day divided by 365.
86	86	3.24 (e) The portion related to scholarships is determined under section 256R.37.
87	87	3.25 (f) The portion related to planned closure rate adjustments is as determined under section
88	88	3.26256R.40, subdivision 5, and Minnesota Statutes 2010, section 256B.436.
89	89	3.27 (g) The portion related to consolidation rate adjustments shall be as determined under
90	90	3.28section 144A.071, subdivisions 4c, paragraph (a), clauses (5) and (6), and 4d.
91	91	3.29 (h) The portion related to single-bed room incentives is as determined under section
92	92	3.30256R.41.
93	93	3Sec. 6.
94	94	25-01989 as introduced01/28/25 REVISOR AGW/LJ 4.1 (i) The portions related to real estate taxes, special assessments, and payments made in
95	95	4.2lieu of real estate taxes directly identified or allocated to the nursing facility are the allowable
96	96	4.3amounts divided by the sum of the facility's resident days. Allowable costs under this
97	97	4.4paragraph for payments made by a nonprofit nursing facility that are in lieu of real estate
98	98	4.5taxes shall not exceed the amount which the nursing facility would have paid to a city or
99	99	4.6township and county for fire, police, sanitation services, and road maintenance costs had
100	100	4.7real estate taxes been levied on that property for those purposes.
101	101	4.8 (j) The portion related to employer health insurance costs is the calculated as follows:
102	102	4.9 (1) multiply the facility's allowable employer health insurance costs divided and the
103	103	4.10known cost change factor; and
104	104	4.11 (2) divide the result of clause (1) by the sum of the facility's resident days.
105	105	4.12 (k) The portion related to the Public Employees Retirement Association is the allowable
106	106	4.13costs divided by the sum of the facility's resident days.
107	107	4.14 (l) The portion related to quality improvement incentive payment rate adjustments is
108	108	4.15the amount determined under section 256R.39.
109	109	4.16 (m) The portion related to performance-based incentive payments is the amount
110	110	4.17determined under section 256R.38.
111	111	4.18 (n) The portion related to special dietary needs is the amount determined under section
112	112	4.19256R.51.
113	113	4.20 (o) The portion related to the rate adjustments for border city facilities is the amount
114	114	4.21determined under section 256R.481.
115	115	4.22 (p) The portion related to the rate adjustment for critical access nursing facilities is the
116	116	4.23amount determined under section 256R.47.
117	117	4.24 (q) The portion related to the rate adjustment for nursing home wage standards is the
118	118	4.25amount determined under section 256R.495. This paragraph expires January 1, 2029.
119	119	4.26 EFFECTIVE DATE.The amendment to paragraph (a) and the new paragraph (q) are
120	120	4.27effective January 1, 2026, or upon federal approval, whichever is later, and apply retroactively
121	121	4.28to the rate year beginning January 1, 2026. The amendments to paragraph (j) are effective
122	122	4.29January 1, 2027, or upon federal approval, whichever is later, and apply retroactively to the
123	123	4.30rate year beginning January 1, 2027. The commissioner of human services shall notify the
124	124	4.31revisor of statutes when federal approval is obtained.
125	125	4Sec. 6.
126	126	25-01989 as introduced01/28/25 REVISOR AGW/LJ 5.1 Sec. 7. [256R.495] RATE ADJUSTMENT FOR NURSING HOME WAGE
127	127	5.2STANDARDS.
128	128	5.3 Subdivision 1.Nursing facility rate adjustment.Effective for the rate years beginning
129	129	5.4January 1, 2026, and January 1, 2027, nursing facility rates under this chapter must include
130	130	5.5a rate adjustment to pay for the nursing home wage standards promulgated by the Nursing
131	131	5.6Home Workforce Standards Board and adopted as proposed on October 28, 2024. Each
132	132	5.7nursing facility reimbursed under this chapter must report to the commissioner the wage
133	133	5.8rate for every employee and contracted employees below the minimum wage standards
134	134	5.9established by the board under section 181.212.
135	135	5.10 Subd. 2.Application for January 1, 2026, and January 1, 2027, rate adjustments.(a)
136	136	5.11To receive a rate adjustment, a nursing facility must submit an application for each rate year
137	137	5.12in which the rate adjustment under this section is in effect to the commissioner in a form
138	138	5.13and manner determined by the commissioner. The application must include data for a period
139	139	5.14beginning with the first pay period after July 1 of the year prior to the rate year in which
140	140	5.15the rate adjustment takes effect, including at least three months of employee compensated
141	141	5.16hours by wage rate, and a spending plan that describes how the funds from the rate adjustment
142	142	5.17will be allocated for compensation to employees as defined by Minnesota Rules, part
143	143	5.185200.2060, that are paid less than the general wage standards defined in Minnesota Rules,
144	144	5.19part 5200.2080, and the wage standards for certain positions defined by Minnesota Rules,
145	145	5.20part 5200.2090. The application must be submitted by October 1 of the year prior to the
146	146	5.21rate year in which the rate adjustment takes effect. The commissioner may request any
147	147	5.22additional information needed to determine the rate adjustment within 20 calendar days of
148	148	5.23receiving a completed application. The nursing facility must provide any additional
149	149	5.24information requested by the commissioner within 20 calendar days of receiving a request
150	150	5.25from the commissioner for additional information. The commissioner may waive the
151	151	5.26deadlines in this subdivision under extraordinary circumstances.
152	152	5.27 (b) For a nursing facility in which employees are represented by an exclusive bargaining
153	153	5.28representative, the commissioner shall approve an application submitted under this
154	154	5.29subdivision only upon receipt of a letter of acceptance of the spending plan in regard to
155	155	5.30members of the bargaining unit, signed by the exclusive bargaining agent and dated after
156	156	5.31July 1 of the year prior to the rate year in which the rate adjustment takes effect. Upon
157	157	5.32receipt of the letter of acceptance, the commissioner shall deem all requirements of this
158	158	5.33paragraph met in regard to the members of the bargaining unit.
159	159	5.34 Subd. 3.January 1, 2026, rate adjustment calculation.Based on the application in
160	160	5.35subdivision 2, the commissioner shall calculate the annualized compensation costs by adding
161	161	5Sec. 7.
162	162	25-01989 as introduced01/28/25 REVISOR AGW/LJ 6.1the totals of clauses (1) to (5). The result must be divided by the resident days from the most
163	163	6.2recently available cost report to determine a per diem amount, which must be included in
164	164	6.3the external fixed costs payment rate under section 256R.25:
165	165	6.4 (1) for all nursing home workers, the sum of the difference between $19.00 and any
166	166	6.5hourly wage rate of less than $19.00, multiplied by the number of compensated hours at
167	167	6.6that wage rate;
168	168	6.7 (2) for certified nursing assistants, the sum of the difference between $22.50 and any
169	169	6.8hourly wage rate of less than $22.50, multiplied by the number of compensated hours at
170	170	6.9that wage rate;
171	171	6.10 (3) for trained medication aides, the sum of the difference between $23.50 and any hourly
172	172	6.11wage rate of less than $23.50, multiplied by the number of compensated hours at that wage
173	173	6.12rate;
174	174	6.13 (4) for licensed practical nurses, the sum of the difference between $27.00 and any hourly
175	175	6.14wage rate of less than $27.00, multiplied by the number of compensated hours at that wage
176	176	6.15rate; and
177	177	6.16 (5) the sum of the employer's share of FICA taxes, Medicare taxes, state and federal
178	178	6.17unemployment taxes, workers' compensation, pensions, and contributions to employee
179	179	6.18retirement accounts attributable to the amounts in clauses (1) to (4).
180	180	6.19 Subd. 4.January 1, 2027, rate adjustment calculation.Based on the application in
181	181	6.20subdivision 2, the commissioner shall calculate the annualized compensation costs by adding
182	182	6.21the totals of clauses (1) to (5). The result must be divided by the resident days from the most
183	183	6.22recently available cost report to determine a per diem amount, which must be included in
184	184	6.23the external fixed costs payment rate under section 256R.25:
185	185	6.24 (1) for all nursing home workers, the sum of the difference between $20.50 and any
186	186	6.25hourly wage rate of less than $20.50, multiplied by the number of compensated hours at
187	187	6.26that wage rate;
188	188	6.27 (2) for certified nursing assistants, the sum of the difference between $24.00 and any
189	189	6.28hourly wage rate of less than $24.00, multiplied by the number of compensated hours at
190	190	6.29that wage rate;
191	191	6.30 (3) for trained medication aides, the sum of the difference between $25.00 and any hourly
192	192	6.31wage rate of less than $25.00, multiplied by the number of compensated hours at that wage
193	193	6.32rate;
194	194	6Sec. 7.
195	195	25-01989 as introduced01/28/25 REVISOR AGW/LJ 7.1 (4) for licensed practical nurses, the sum of the difference between $28.50 and any hourly
196	196	7.2wage rate of less than $28.50, multiplied by the number of compensated hours at that wage
197	197	7.3rate; and
198	198	7.4 (5) the sum of the employer's share of FICA taxes, Medicare taxes, state and federal
199	199	7.5unemployment taxes, workers' compensation, pensions, and contributions to employee
200	200	7.6retirement accounts attributable to the amounts in clauses (1) to (4).
201	201	7.7 Subd. 5.Rate adjustment timeline.(a) For the rate year beginning January 1, 2026,
202	202	7.8nursing facilities that receive approval of the application in subdivision 2 must receive a
203	203	7.9rate adjustment according to subdivision 3. The rate adjustment must continue to be included
204	204	7.10in the external fixed costs payment rate under section 256R.25 until January 1, 2028.
205	205	7.11 (b) For the rate year beginning January 1, 2027, nursing facilities that receive approval
206	206	7.12of the application in subdivision 2 must receive a rate adjustment according to subdivision
207	207	7.134. The rate adjustment must continue to be included in the external fixed costs payment rate
208	208	7.14under section 256R.25 until January 1, 2029.
209	209	7.15 Subd. 6.Expiration.This section expires January 1, 2029.
210	210	7.16 EFFECTIVE DATE.This section is effective July 1, 2025, or upon federal approval,
211	211	7.17whichever is later. The commissioner of human services shall notify the revisor of statutes
212	212	7.18when federal approval is obtained.
213	213	7.19 Sec. 8. Minnesota Statutes 2024, section 256S.211, subdivision 1, is amended to read:
214	214	7.20 Subdivision 1.Establishing base wages.When establishing and updating the base wages
215	215	7.21according to section 256S.212, the commissioner shall use standard occupational
216	216	7.22classification (SOC) codes from the Bureau of Labor Statistics as defined in the edition of
217	217	7.23the Occupational Handbook published immediately prior to January 1, 2019 most recently,
218	218	7.24using Minnesota-specific wages taken from job descriptions.
219	219	7.25 EFFECTIVE DATE.This section is effective January 1, 2026, or upon federal approval,
220	220	7.26whichever occurs later. The commissioner of human services shall notify the revisor of
221	221	7.27statutes when federal approval is obtained.
222	222	7.28 Sec. 9. Minnesota Statutes 2024, section 256S.211, subdivision 2, is amended to read:
223	223	7.29 Subd. 2.Updating rates.On January 1, 2024 2026, and each January 1 thereafter, the
224	224	7.30commissioner shall update component rates and rates according to sections 256S.212 to
225	225	7.31256S.215, using the data referenced in subdivision 1.
226	226	7Sec. 9.
227	227	25-01989 as introduced01/28/25 REVISOR AGW/LJ 8.1 EFFECTIVE DATE.This section is effective January 1, 2026, or upon federal approval,
228	228	8.2whichever occurs later. The commissioner of human services shall notify the revisor of
229	229	8.3statutes when federal approval is obtained.
230	230	8.4 Sec. 10. Minnesota Statutes 2024, section 256S.213, subdivision 1, is amended to read:
231	231	8.5 Subdivision 1.Payroll taxes and benefits factor.(a) The payroll taxes and benefits
232	232	8.6factor is the sum of net payroll taxes and benefits, divided by the sum of all salaries for all
233	233	8.7nursing facilities on the most recent and available cost report.
234	234	8.8 (b) The commissioner must update the payroll taxes and benefits factor each January 1.
235	235	8.9 EFFECTIVE DATE.This section is effective January 1, 2026, or upon federal approval,
236	236	8.10whichever occurs later. The commissioner of human services shall notify the revisor of
237	237	8.11statutes when federal approval is obtained.
238	238	8Sec. 10.
239	239	25-01989 as introduced01/28/25 REVISOR AGW/LJ