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2025 Session Last amended: 2025 session

§ 256R.23 — Total Care-related Payment Rates

Plain-Language Summary

This section sets the limits and calculations for care-related payment rates. The median cost per day is based on nursing facilities in the seven-county metro area. A facility's quality score affects its rate limit. Annual increases are capped at CPI-U inflation or 4 percent, whichever is less.

256R.23 TOTAL CARE-RELATED PAYMENT RATES.

§

Each facility’s total care-related cost per day is the sum of its direct care cost per standardized day and its other care-related cost per resident day. §

Subd. 2.Calculation of direct care cost per standardized day.

Each facility’s direct care cost per standardized day is the facility’s direct care costs divided by the sum of the facility’s standardized days. A facility’s direct care cost per standardized day is the facility’s cost per day for direct care services associated with a case mix index of 1.00. §

Each facility’s other care-related cost per resident day is its other care-related costs, divided by the sum of the facility’s resident days. §

The commissioner must determine the median total care-related cost per day using the cost reports from nursing facilities in Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington Counties. §

The commissioner must determine each facility’s total care-related payment rate limit by:

(1) multiplying the facility’s quality score, as determined under section 256R.16, subdivision 1, by 0.5625;

(2) adding 89.375 to the amount determined in clause (1), and dividing the total by 100; and

(3) multiplying the amount determined in clause (2) by the median total care-related cost per day. §

Subd. 6.

MS 2024 [Repealed, 1Sp2025 c 9 art 1 s 32] §

Subd. 7.Determination of direct care payment rates.

A facility’s direct care payment rate equals the lesser of (1) the facility’s direct care costs per standardized day, (2) the facility’s direct care costs per standardized day divided by its cost to limit ratio, (3) the previous year’s direct care payment rate times one plus CPI-U inflation, or (4) 104 percent of the previous year’s direct care payment rate. §

A facility’s other care-related payment rate equals the lesser of (1) the facility’s other care-related cost per resident day, (2) the facility’s other care-related cost per resident day divided by its cost to limit ratio, (3) the previous year’s other care-related rate times one plus CPI-U inflation, or (4) 104 percent of the previous year’s other care-related payment rate. §

A facility’s total care-related payment rate is the sum of its direct care payment rate as determined in subdivision 7 and its other care-related payment rate as determined in subdivision 8.

History:

2016 c 99 art 1 s 18; 1Sp2025 c 9 art 1 s 14,15

History: History: 2016 c 99 art 1 s 18; 1Sp2025 c 9 art 1 s 14,15

Practical Notes
Facilities with higher quality scores get higher rate limits. The rate limit formula uses the facility’s quality score multiplied by 0.5625, added to 89.375, then applied to the metro median cost. Direct care and other care-related rates are each capped at the lesser of actual costs, cost-to-limit ratio, or the inflation-adjusted prior year rate.
Source: Minnesota Office of the Revisor of Statutes