S.F. No. 2708 creates alternative residential placement options for patients with complex and serious medical and behavioral health conditions by (1) providing an exception to the moratorium on the certification of nursing home beds and a nursing facility payment rate add-on, (2) permitting demonstration projects under the Health Care Delivery System Demonstration Project to serve this population, and (3) modifying inpatient hospitals payments.

Section 1 (144A.071, subdivision 4c – Exceptions for Replacement Beds after June 30, 2003) allows the Commissioner of Health to permit an exception to the moratorium on the certification of nursing home beds if the new or replacement beds will provide residential placement options for patients with complex co-occurring chronic medical conditions and either serious mental illness or substance abuse conditions who are committed to the commissioner and whose treatment would be less effective or more costly if not residing in a nursing home.

Section 2 (256.969, subdivision 31 – Hospital Rates for Certain Patients Committed to the Commissioner) requires the Commissioner of Human Services to provide additional payments for inpatient hospital services provided to patients with complex co-occurring chronic medical conditions and either serious mental illness or substance abuse conditions who are committed to the commissioner and who are placed in or remain in the hospital because there is no space available in a state-operated facility.

Section 3 (256.9693 – Inpatient Treatment for Mental Illness) requires managed-care plans and county-based purchasing plans to use the same admission criteria for the continuing care benefit program as are used by hospitals contracting with the commissioner for the provision of this service.

Section 4 (256B.0755, subdivision 8 – Demonstration Projects for Small High-Cost Populations) permits the commissioner to authorize small innovative projects under the Health Care Delivery System Demonstration Project that seek to improve outcomes for and reduce the costs of care for high-cost patients who have complex and serious medical and behavioral health conditions.

Section 5 (256B.441, subdivision 68 – Rate Adjustment for Committed Patients) directs the Commissioner of Human Services to develop a cost-based nursing facility payment rate add-on for the care of patients with complex co-occurring chronic medical conditions and either serious mental illness or substance abuse conditions who are committed to the commissioner and who are admitted to a nursing facility after hospital discharge due to a lack of other appropriate placement options.

Section 5 (Appropriations) appropriates $3 million from the general fund to the Commissioner of Human Services for inpatient hospital payment rate adjustments for the care of patients committed to the commissioner, and an unspecified amounts for nursing facility payment rate adjustments.