SF5026

Purpose

• Clarify how border-area nursing facilities’ rate adjustments are calculated under Minnesota law. The bill focuses on adjusting payments for certain nonprofit nursing facilities located in border cities so their rates better reflect cross-border comparisons.

Main Provisions

• Applies to nonprofit nursing facilities located in Breckenridge or Moorhead before January 1, 2015.
• Each eligible facility can apply once per year for a rate addon to its external fixed costs payment rate.
• Applications must be submitted within 60 calendar days after the effective date of any addon; the commissioner can waive this deadline in extraordinary circumstances.
• The commissioner must provide the addon to any eligible facility that applies by the deadline.
• The addon amount is defined as the difference between:
  • The median total payment rate for case mix classification PA1 (the lowest PA1 level) for nonprofit facilities in an adjacent city in another state and in cities contiguous to that city, minus
  • The eligible facility’s total payment rate for PA1 (the same lowest PA1 level).
• In short, the addon makes the Minnesota facility’s PA1 rate closer to the cross-border median PA1 rate.

Eligibility and Application Details

• Only nonprofit nursing facilities located in Breckenridge or Moorhead as of before 2015 qualify.
• The facility must apply annually to receive the addon.
• The application must be submitted within 60 days of the addon’s effective date, with potential waivers for extraordinary circumstances.

Calculation Details

• The addon uses PA1, the lowest case-mix classification.
• It compares the Minnesota facility’s PA1 rate to the median PA1 rate of:
  • An adjacent city in another state, and
  • Cities contiguous to that adjacent city.
• The addon equals the difference between that cross-border median PA1 rate and the facility’s PA1 rate.

Significance and Potential Impact

• Aims to reduce rate disparities between Minnesota border facilities and nearby non-Minnesota facilities.
• Creates an ongoing annual process for border facilities to receive adjustments to their external fixed costs payments.
• Changes are made within the existing framework of Minnesota’s rate-setting for nursing facilities (specifically related to 256R.481 and PA1 classification).

Changes to Existing Law

• Updates Minnesota Statutes 2024 section 256R.481 to specify the annual application process, eligibility, deadlines, and the formula for calculating the addon.
• Repeats and clarifies the cross-border comparison approach used to determine the addon amount for border-city facilities.

Relevant dates and entities included in the bill are limited to the Breckenridge and Moorhead border facilities and the cross-border pricing context.

Relevant Terms - border city facilities - nonprofit nursing facility - Breckenridge - Moorhead - external fixed costs payment rate - rate addon - PA1 (case mix classification) - median total payment rate - adjacent city in another state - cities contiguous to the adjacent city - Minnesota Statutes 256R.481 - annual application - 60 calendar days - extraordinary circumstances - rate adjustment