Permanent nursing facility moratorium funding appropriated 2021, 1st Special Session HF33/SF37 Chapter 7, Article 13, Sections 2–3 HHS omnibus bill Effective: July 1, 2021 Short description Permanent funding for nursing facility projects funded by an exception to the nursing facility moratorium was appropriated. Summary Care Providers of Minnesota introduced legislation requesting $10 million per biennium appropriated by the state to fund nursing facility projects including those in response to the demands of the pandemic (e.g., private rooms). The legislature responded with a sizeable portion of the request and most importantly made future rounds permanent. During the biennium beginning July 1, 2021, and during each biennium thereafter, the commissioner of health may approve moratorium exception projects for which the full biennial state share of Medicaid costs does not exceed $4,000,000, plus any carryover of previous appropriations for this purpose. Because the state need only appropriate funds to cover the state’s share of the amortized cost of the project, a relatively small appropriation generates a sizable return in construction projects. Seven nursing facilities with projects totaling $91,617,774 were approved under the 2019 moratorium round at an annual cost of $1,165,578 to the state general fund. Implications In 2019, the legislature adopted a Fair Rental Value (FRV) property rate system for nursing facility moratorium exception projects. This important reform was based on research funded by the 2015 payment reform bill and has created an important mechanism to ensure much needed investments in infrastructure and physical plant improvements in the state’s outdated and aging nursing homes. A Fair Rental Value (FRV) property rate system establishes a price for use of space regardless of actual accounting cost, where: •
The state is essentially leasing the facility for the use of their Medicaid patients
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The rental rate is based on an index related to capital costs
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The total replacement cost, current depreciated value and square footage determined by the appraisal is used to determine facility value
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Price is facility value times rental rate adjusted to a per day payment
CARE PROVIDERS OF MINNESOTA
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2021 LEGISLATIVE UPDATE BOOK
