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S.F. No. 1471 - Nursing and Certified Boarding Care Homes Provisions - the Second Engrossment
Author: Senator Kent Eken
Prepared By: Liam Monahan, Senate Analyst (651/296-1791)
Date: April 14, 2015


SF 1471 makes changes to the provisions governing receivership of nursing homes or certified boarding care homes. 

Section 1 (144A.15) modifies the provisions governing receivership of nursing homes or certified boarding care homes.  In such receiverships, the Commissioner of Health assumes responsibility for the facility, its assets, and the care, health, safety and well-being of its residents.

Subdivision 1 expands the list of grounds on which the Commissioner of Health may petition a court to direct the owner, licensee, or controlling party of the facility to show why the commissioner should not be appointed receiver of the facility.

Subdivision 2 permits the commissioner to enter into an agreement with a third-party managing agent to operate a facility of which the commissioner has been appointed receiver, and modifies the rental fee to be paid by the commissioner during the receivership.  This subdivision also requires the commissioner to maintain a list of qualified potential managing agents.

Subdivision 2a shortens the legal timeline for the judge to issue an order authorizing the receivership.

Subdivision 3, Paragraph (a), permits the commissioner up to 18 months to decide whether to close a facility in receivership or make other provisions to keep it open; requires the commissioner to consider keeping a facility open and operating past receivership; permits the commissioner to require the operator of the facility after receivership to take steps to protect the health, safety, and well-being of residents; requires the commissioner to use all the facility’s available assets to provide service and care to the residents; requires the commissioner to use all incoming payments to perform the receiver’s function, including those payments for services prior to receivership; requires the commissioner to pay valid obligations incurred prior to receivership if doing so is necessary to ensure the health, safety, or welfare of the residents; and grants authority to the commissioner to hire, direct, manage, and discharge any employee of the facility.

Subdivision 3, Paragraph (b), clarifies that receivership does not relieve the owner, licensee, or controlling party of any criminal or civil liability for any situation occurring prior to receivership.  Nor does receivership suspend the owner’s, licensee’s, or controlling party’s obligations to pay taxes, operating expenses, mortgages, or liens.

Subdivision 4 clarifies that the commissioner may hire a managing agent and that the managing agent is entitled to a reasonable fee for operating the facility during receivership.

Subdivision 5 makes technical and conforming changes.

Subdivision 6, Paragraph (a), specifies that after receivership has ended, if the facility remains open with a new operator, the new operator is legally responsible only for actions that occur after the receivership has concluded.

Paragraph (b) permits the Commissioner of Human Services to makes adjustments to the cost reports covering the time during with a facility was in receivership and for the year prior to receivership.

Section 2 (256B.0641, subd. 3) eliminates a cross-reference.

Section 3 (256B.495, subd. 1) simplifies existing language.

Section 4 (256B.495, subd. 5) Paragraph (a) modifies the duty of the Commissioner of Human Services to recover certain payments after a nursing facility is sold or transferred.  Under current law, the commissioner is required to make recovers from the buyer or transferee.  This paragraph requires the commissioner to seek recovers from the prior owner, prior licensee, or prior controlling party.

Paragraph (b) permits the Commissioner of Human Services to make recoveries from a prior owner, licensee, or controlling party by withholding medical assistance payments to any of their other providers.  It also requires prior owners, licensees, or controlling party to repay private-pay residents for the portion of the receivership fee they paid.

Paragraph (c) simplifies existing language.

Section 5 is a Revisor’s instruction.

Section 6 is a repealer.

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