SF5042

Purpose

To update Minnesota’s aging and disability services, strengthen licensing and program integrity in behavioral and mental health, modernize how long-term care is assessed and paid for, and adjust funding and reporting requirements. The bill makes broad changes to how assessments are defined, how residents are classified for payment, and which statutes are updated or repealed to align with new standards and funding decisions.

Main Provisions

• Definitions for key terms used in long-term care assessments and payment:
  • Assessment Reference Date (ARD)
  • Minimum Data Set (MDS)
  • Case Mix Index
  • Index Maximization
  • Activities of Daily Living (ADL)
  • Representative (guardian, conservator, or other designated person)
  • Nursing Facility Level of Care Determination
• Transition from older payment classifications to a new system:
  • Patient Driven Payment Model (PDPM) becomes the primary case-mix system for nursing facility payments with an ARD on or after October 1, 2025.
  • Resource Utilization Groups (RUG) remain in use for ARDs on or before September 30, 2025.
• Scope of the level-of-care determination:
  • The level-of-care determination affects Medical Assistance (MA) payments for long-term care services, including:
  • Nursing facility services (chapter 256R)
  • Elderly Waiver (EW) services (chapter 256S)
  • CADI and BI waivers (section 256B.49)
  • State payment for Alternative Care services (section 256B.0913)
  • The changes include a target timeline for implementation, with an effective date around January 1, 2027 or later if federal approval is needed.
• Cross-statutory changes and repeals:
  • The bill codes in new definitions and the PDPM/RUG framework across a wide array of statutes (e.g., chapters 245A, 245I, 256B, 256R, 256S, and related sections).
  • It also introduces new subdivisions and repeals certain existing provisions to reflect the updated framework.
• Other policy updates:
  • Revisions related to aging and disability services administration, behavioral health licensing and program integrity, and mental health licensing.
  • Background studies and related implementation funding, forecasting, and required reporting to monitor and adjust program appropriations.

Significant Changes to Existing Law

• Major shift in long-term care payment methodology:
  • Replaces or supersedes the prior case-mix system (RUG) with PDPM for nursing facility payments for ARDs on/after October 1, 2025.
  • Retains RUG for ARDs before October 1, 2025.
• New, standardized definitions:
  • Establishes consistent language for MDS, ARD, ADL, case mix classifications, and how they influence payment and care determinations.
• Expanded scope for level-of-care determinations:
  • Ties nursing facility level-of-care determinations to MA payments across nursing facilities and several waivers, with a defined effective date framework.
• Licensing and program integrity enhancements:
  • Updates or adds requirements related to behavioral health licensing, mental health licensing, and related program integrity measures.
• Funding and reporting:
  • Includes forecasted adjustments to program appropriations and new reporting requirements to track funding and policy effects.

Implementation Timeline (Key Dates)

• October 1, 2025: PDPM becomes the basis for nursing facility payments for residents with an ARD on or after this date; RUG remains in place for ARDs before this date.
• January 1, 2027 (or sooner if federal approval is received): Effective date tied to the new nursing facility level-of-care determinations and related payment rules, as specified by the bill.

Potential Impacts

• Providers and facilities:
  • Will use PDPM to determine payments for residents with ARDs after Oct 1, 2025, which may change reimbursement amounts compared with the prior system.
• Residents and families:
  • Assessments and eligibility determinations may shift under PDPM and the new level-of-care framework, potentially affecting services and funding.
• State programs and funding:
  • Revisions to multiple statutes and cross-references, with forecasted adjustments and added reporting obligations to monitor the impact on budgets and programs.

Relevant Terms - ARD (Assessment Reference Date) - MDS (Minimum Data Set) - Case Mix Index - Index Maximization - ADL (Activities of Daily Living) - Nursing Facility Level of Care Determination - PDPM (Patient Driven Payment Model) - RUG (Resource Utilization Group) - MA (Medical Assistance) - Nursing Facility services (256R) - Elderly Waiver (EW) (256S) - CADI/BI waivers (256B.49) - State payment of Alternative Care services (256B.0913) - Minnesota Statutes references: 144.0724, 256R, 256S, 256B.49, 256B.0913, 245A, 245I, 256R, 256S (and related cross-references)

If you’d like, I can tailor this summary to focus more on how it would affect specific groups (nursing facilities, home- and community-based waivers, or licensing agencies) or add a brief plain-language example of how PDPM differs from RUG in this context.