By Toby Pearson
At 9:00 a.m. on July 20, 2011, Minnesota Governor Mark Dayton signed into law a dozen budget bills passed in a 13-hour special legislative session which began on July 19 at 3:00 p.m. These bills provide funding for state government operations for the next two years in the amount of $35.4 billion. The Legislature passed the bills as agreed to by Governor Dayton, without amendment.
State employees are expected to begin returning to work on Thursday, July 21, 2011, although some agencies may phase in their startups. Road construction projects, for example, may require a longer startup period than other agency operations. State parks are expected to begin opening on Thursday.
The 20-day government shutdown was the longest in state history and possibly the longest ever for any state government. However, the reliance on one-time borrowing for the budget solution indicates that the state's budget troubles are not necessarily over. Fine-tuning of this year’s budget solution can be expected in the 2012 Minnesota legislative session.
The Legislature and Governor Dayton sent mixed messages in the details of their health and human services (HHS) budget agreement. On the one hand the agreement does not cut nursing facility (NF) rates in this biennium, with the exception of the reductions to specific rate add-ons (leave days, planned closure rate adjustment (PCRA), automatic property rate increase); and provides for a small increase to the lowest-rate nursing homes (approximately 70 of the lowest-rate facilities). On the other hand, it also repeals rebasing—a critical payment reform measure adopted in 2007 that in practical terms forgoes $133 million in promised payments to nursing homes starting in 2013.
The budget also includes significant cuts to cost-saving home- and community-based services, while creating a new layer of government bureaucracy by including language for mandatory transitional consultation, requiring all housing with services (HWS) establishments to “inform all prospective residents of the availability of long-term care consultation and the need to receive and verify the consultation prior to signing a lease or contract.” It is noteworthy to mention that the most significant and concerning elements of the HHS budget—mandatory transitional counseling for all seniors and the repeal of rebasing—were never discussed publicly during the “regular” legislative session.
Key Elements of HHS Budget
- Elimination of $133 million in promised payments to nursing homes as a result of repealing rebasing legislation passed in 2007
- No phaseout of rate equalization
- $17 million in cuts to elderly waiver (EW) programs
- $4.4 million in reductions to specific rate components for nursing homes and $1.2 million increase for the lowest-rate nursing homes in the state (approx. 70 out of 384 nursing homes will receive up to a 2.45 percent increase)
- Mandatory counseling with a government employee for all seniors seeking home- and community-based care, which “books” a savings
- Numerous policy changes, including the establishment of a nursing facility pilot project, waivers to implement level of care changes on July 1, 2012, and application by the human services commissioner to the federal government for a medical assistance reform waiver.
FY 2010-2013 Biennium Budget for EW and NF
|
Elderly Waiver |
FY2012 |
FY2013 |
Total |
|
Base spending projected state share (Nov. 2010 forecast) |
$163,106,180 |
$170,181,762 |
$333,287,942 |
|
Manage elderly waiver program (case mix L, 24-hour CL changes, and rate cut) |
($7,490,000) |
($8,506,000) |
($15,996,000) |
|
Separate EW and NF rates |
($238,000) |
($1,001,000) |
($1,239,000) |
|
Long-term care options counseling for HWS |
($731,000) |
($3,074,000) |
($3,805,000) |
|
Total reduction in payments |
($8,459,000) |
($12,581,000) |
($21,040,000) |
|
|
|
|
|
|
Reduction as a percent |
-5.19% |
-7.39% |
-6.31% |
|
|
|
|
|
|
Nursing Facilities |
FY2012 |
FY2013 |
Total |
|
Base spending projected state share (Nov. 2010 forecast) |
$394,683,580 |
$379,954,989 |
$774,638,569 |
|
Modify non-rate payments: PCRA, bed hold |
($1,526,000) |
($1,828,000) |
($3,354,000) |
|
Freeze property rates |
($304,000) |
($741,000) |
($1,045,000) |
|
Low-rate facilities increase |
$486,000 |
$713,000 |
$1,199,000 |
|
Total reduction in payments |
($1,344,000) |
($1,856,000) |
($3,200,000) |
|
|
|
|
|
|
Reduction as a percent |
-0.34% |
-0.49% |
-0.41% |
|
|
|
|
|
|
|
|
Total for biennium |
$1,107,926,511 |
|
|
|
|
($24,240,000) |
|
|
|
|
-2.19% |
|
|
|
|
|
|
|
FY2014 |
FY2015 |
Total |
|
Plus, nursing facility rebasing of operating rates eliminated for FY2014-2015 |
($61,000,000) |
($72,000,000) |
($133,000,000) |
Association staff are presently reviewing all of the sections of the 250-page bill, and spreadsheets and further details will be provided at an upcoming legislative session webinar. Since several of the sections included in the bill have had no public discussion, it may be necessary for us to meet with the state agency involved to determine the intent and implications of each of these sections. If you are interested in reading the details yourself, the HHS bill, summary and spreadsheet are available at: http://www.house.leg.state.mn.us/ss2011/.
Toby Pearson
952.851.2480
tpearson@careproviders.org
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