Compliance training for high-risk medical assistance providers required, and disclosure of the use of consultants to prepare license applications required.

A bill for an act

relating to human services; requiring compliance training for high-risk medical

assistance providers; requiring disclosure of the use of consultants to prepare

certain license applications; amending Minnesota Statutes 2025 Supplement,

sections 245A.04, subdivisions 1, 7; 245A.05; 256B.051, subdivision 6; 256B.0701,

subdivision 9; proposing coding for new law in Minnesota Statutes, chapter 256B;

repealing Minnesota Statutes 2025 Supplement, sections 256B.051, subdivision

6b; 256B.0701, subdivision 11.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2025 Supplement, section 245A.04, subdivision 1, is

amended to read:

Subdivision 1.

Application for licensure.

(a) An individual, organization, or government

entity that is subject to licensure under section
245A.03
must apply for a license. The

application must be made on the forms and in the manner prescribed by the commissioner.

The commissioner shall provide the applicant with instruction in completing the application

and provide information about the rules and requirements of other state agencies that affect

the applicant. An applicant seeking licensure in Minnesota with headquarters outside of

Minnesota must have a program office located within 30 miles of the Minnesota border.

An applicant who intends to buy or otherwise acquire a program or services licensed under

this chapter that is owned by another license holder must apply for a license under this

chapter and comply with the application procedures in this section and section
245A.043
.

The commissioner shall act on the application within 90 working days after a complete

application and any required reports have been received from other state agencies or

departments, counties, municipalities, or other political subdivisions. The commissioner

shall not consider an application to be complete until the commissioner receives all of the

required information. If the applicant or a controlling individual is the subject of a pending

administrative, civil, or criminal investigation, the application is not complete until the

investigation has closed or the related legal proceedings are complete.

When the commissioner receives an application for initial licensure that is incomplete

because the applicant failed to submit required documents or that is substantially deficient

because the documents submitted do not meet licensing requirements, the commissioner

shall provide the applicant written notice that the application is incomplete or substantially

deficient. In the written notice to the applicant the commissioner shall identify documents

that are missing or deficient and give the applicant 45 days to resubmit a second application

that is substantially complete. An applicant's failure to submit a substantially complete

application after receiving notice from the commissioner is a basis for license denial under

section
245A.043
.

(b) An application for licensure must identify all controlling individuals as defined in

section
245A.02, subdivision 5a
, and must designate one individual to be the authorized

agent. The application must be signed by the authorized agent and must include the authorized

agent's first, middle, and last name; mailing address; and email address. By submitting an

application for licensure, the authorized agent consents to electronic communication with

the commissioner throughout the application process. The authorized agent must be

authorized to accept service on behalf of all of the controlling individuals. A government

entity that holds multiple licenses under this chapter may designate one authorized agent

for all licenses issued under this chapter or may designate a different authorized agent for

each license. Service on the authorized agent is service on all of the controlling individuals.

It is not a defense to any action arising under this chapter that service was not made on each

controlling individual. The designation of a controlling individual as the authorized agent

under this paragraph does not affect the legal responsibility of any other controlling individual

under this chapter.

(c) An applicant or license holder must have a policy that prohibits license holders,

employees, subcontractors, and volunteers, when directly responsible for persons served

by the program, from abusing prescription medication or being in any manner under the

influence of a chemical that impairs the individual's ability to provide services or care. The

license holder must train employees, subcontractors, and volunteers about the program's

drug and alcohol policy before the employee, subcontractor, or volunteer has direct contact,

as defined in section
245C.02, subdivision 11
, with a person served by the program.

(d) An applicant and license holder must have a program grievance procedure that permits

persons served by the program and their authorized representatives to bring a grievance to

the highest level of authority in the program.

(e) The commissioner may limit communication during the application process to the

authorized agent or the controlling individuals identified on the license application and for

whom a background study was initiated under chapter 245C. Upon implementation of the

provider licensing and reporting hub, applicants and license holders must use the hub in the

manner prescribed by the commissioner. The commissioner may require the applicant,

except for child foster care, to demonstrate competence in the applicable licensing

requirements by successfully completing a written examination. The commissioner may

develop a prescribed written examination format.

(f) When an applicant is an individual, the applicant must provide:

(1) the applicant's taxpayer identification numbers including the Social Security number

or Minnesota tax identification number, and federal employer identification number if the

applicant has employees;

(2) at the request of the commissioner, a copy of the most recent filing with the secretary

of state that includes the complete business name, if any;

(3) if doing business under a different name, the doing business as (DBA) name, as

registered with the secretary of state;

(4) if applicable, the applicant's National Provider Identifier (NPI) number and Unique

Minnesota Provider Identifier (UMPI) number; and

(5) at the request of the commissioner, the notarized signature of the applicant or

authorized agent.

(g) When an applicant is an organization, the applicant must provide:

(1) the applicant's taxpayer identification numbers including the Minnesota tax

identification number and federal employer identification number;

(2) at the request of the commissioner, a copy of the most recent filing with the secretary

of state that includes the complete business name, and if doing business under a different

name, the doing business as (DBA) name, as registered with the secretary of state;

(3) the first, middle, and last name, and address for all individuals who will be controlling

individuals, including all officers, owners, and managerial officials as defined in section

245A.02, subdivision 5a
, and the date that the background study was initiated by the applicant

for each controlling individual;

(4) if applicable, the applicant's NPI number and UMPI number;

(5) the documents that created the organization and that determine the organization's

internal governance and the relations among the persons that own the organization, have

an interest in the organization, or are members of the organization, in each case as provided

or authorized by the organization's governing statute, which may include a partnership

agreement, bylaws, articles of organization, organizational chart, and operating agreement,

or comparable documents as provided in the organization's governing statute; and

(6) the notarized signature of the applicant or authorized agent.

(h) When the applicant is a government entity, the applicant must provide:

(1) the name of the government agency, political subdivision, or other unit of government

seeking the license and the name of the program or services that will be licensed;

(2) the applicant's taxpayer identification numbers including the Minnesota tax

identification number and federal employer identification number;

(3) a letter signed by the manager, administrator, or other executive of the government

entity authorizing the submission of the license application; and

(4) if applicable, the applicant's NPI number and UMPI number.

(i) At the time of application for licensure or renewal of a license under this chapter, the

applicant or license holder must acknowledge on the form provided by the commissioner

if the applicant or license holder elects to receive any public funding reimbursement from

the commissioner for services provided under the license that:

(1) the applicant's or license holder's compliance with the provider enrollment agreement

or registration requirements for receipt of public funding may be monitored by the

commissioner as part of a licensing investigation or licensing inspection; and

(2) noncompliance with the provider enrollment agreement or registration requirements

for receipt of public funding that is identified through a licensing investigation or licensing

inspection, or noncompliance with a licensing requirement that is a basis of enrollment for

reimbursement for a service, may result in:

(i) a correction order or a conditional license under section
245A.06
, or sanctions under

section
245A.07
;

(ii) nonpayment of claims submitted by the license holder for public program

reimbursement;

(iii) recovery of payments made for the service;

(iv) disenrollment in the public payment program; or

(v) other administrative, civil, or criminal penalties as provided by law.

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(j) An applicant or license holder who acknowledges under paragraph (i) that the applicant

or license holder elects to receive any publicly funded reimbursement from the commissioner

for services provided under the license that are designated by the commissioner as high-risk

under section 256B.04, subdivision 21, must provide an attestation with the notarized

signature of the applicant or authorized agent stating whether the applicant or authorized

agent received from an unaffiliated business or consultant any assistance preparing:

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(1) the application;

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(2) the renewal;

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(3) any documentation or written policies submitted with the application;

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(4) any documentation or written policies submitted with the renewal; or

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(5) any documentation or written policies maintained as a requirement of licensure or

enrollment as a medical assistance provider.

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Sec. 2.

Minnesota Statutes 2025 Supplement, section 245A.04, subdivision 7, is amended

to read:

Subd. 7.

Grant of license; license extension.

(a) If the commissioner determines that

the program complies with all applicable rules and laws, the commissioner shall issue a

license consistent with this section or, if applicable, a temporary change of ownership license

under section
245A.043
. At minimum, the license shall state:

(1) the name of the license holder;

(2) the address of the program;

(3) the effective date and expiration date of the license;

(4) the type of license and the specific service the license holder is licensed to provide;

(5) the maximum number and ages of persons that may receive services from the program;

and

(6) any special conditions of licensure.

(b) The commissioner may issue a license for a period not to exceed two years if:

(1) the commissioner is unable to conduct the observation required by subdivision 4,

paragraph (a), clause (3), because the program is not yet operational;

(2) certain records and documents are not available because persons are not yet receiving

services from the program; and

(3) the applicant complies with applicable laws and rules in all other respects.

(c) A decision by the commissioner to issue a license does not guarantee that any person

or persons will be placed or cared for in the licensed program.

(d) Except as provided in paragraphs (i) and (j), the commissioner shall not issue a

license if the applicant, license holder, or an affiliated controlling individual has:

(1) been disqualified and the disqualification was not set aside and no variance has been

granted;

(2) been denied a license under this chapter or chapter 142B within the past two years;

(3) had a license issued under this chapter or chapter 142B revoked within the past five

years; or

(4) failed to submit the information required of an applicant under subdivision 1,

paragraph (f), (g),
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or
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(h)
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, or (j)
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, after being requested by the commissioner.

When a license issued under this chapter or chapter 142B is revoked, the license holder

and each affiliated controlling individual with a revoked license may not hold any license

under chapter 245A for five years following the revocation, and other licenses held by the

applicant or license holder or licenses affiliated with each controlling individual shall also

be revoked.

(e) Notwithstanding paragraph (d), the commissioner may elect not to revoke a license

affiliated with a license holder or controlling individual that had a license revoked within

the past five years if the commissioner determines that (1) the license holder or controlling

individual is operating the program in substantial compliance with applicable laws and rules

and (2) the program's continued operation is in the best interests of the community being

served.

(f) Notwithstanding paragraph (d), the commissioner may issue a new license in response

to an application that is affiliated with an applicant, license holder, or controlling individual

that had an application denied within the past two years or a license revoked within the past

five years if the commissioner determines that (1) the applicant or controlling individual

has operated one or more programs in substantial compliance with applicable laws and rules

and (2) the program's operation would be in the best interests of the community to be served.

(g) In determining whether a program's operation would be in the best interests of the

community to be served, the commissioner shall consider factors such as the number of

persons served, the availability of alternative services available in the surrounding

community, the management structure of the program, whether the program provides

culturally specific services, and other relevant factors.

(h) The commissioner shall not issue or reissue a license under this chapter if an individual

living in the household where the services will be provided as specified under section

245C.03, subdivision 1
, has been disqualified and the disqualification has not been set aside

and no variance has been granted.

(i) Pursuant to section
245A.07, subdivision 1
, paragraph (b), when a license issued

under this chapter has been suspended or revoked and the suspension or revocation is under

appeal, the program may continue to operate pending a final order from the commissioner.

If the license under suspension or revocation will expire before a final order is issued, a

temporary provisional license may be issued provided any applicable license fee is paid

before the temporary provisional license is issued.

(j) Notwithstanding paragraph (i), when a revocation is based on the disqualification of

a controlling individual or license holder, and the controlling individual or license holder

is ordered under section
245C.17
to be immediately removed from direct contact with

persons receiving services or is ordered to be under continuous, direct supervision when

providing direct contact services, the program may continue to operate only if the program

complies with the order and submits documentation demonstrating compliance with the

order. If the disqualified individual fails to submit a timely request for reconsideration, or

if the disqualification is not set aside and no variance is granted, the order to immediately

remove the individual from direct contact or to be under continuous, direct supervision

remains in effect pending the outcome of a hearing and final order from the commissioner.

(k) Unless otherwise specified by statute, all licenses issued under this chapter expire

at 12:01 a.m. on the day after the expiration date stated on the license. A license holder must

comply with the requirements in section
245A.10
and be reissued a new license to operate

the program or the program must not be operated after the expiration date. Adult foster care,

family adult day services, child foster residence setting, and community residential services

license holders must apply for and be granted a new license to operate the program or the

program must not be operated after the expiration date. Upon implementation of the provider

licensing and reporting hub, licenses may be issued each calendar year.

(l) The commissioner shall not issue or reissue a license under this chapter if it has been

determined that a Tribal licensing authority has established jurisdiction to license the program

or service.

(m) The commissioner of human services may coordinate and share data with the

commissioner of children, youth, and families to enforce this section.

(n) For substance use disorder treatment programs, for the purposes of paragraph (a),

clause (5), the maximum number of persons who may receive services from the program

includes persons served at satellite locations.

Sec. 3.

Minnesota Statutes 2025 Supplement, section 245A.05, is amended to read:

245A.05 DENIAL OF APPLICATION.

(a) The commissioner may deny a license if an applicant or controlling individual:

(1) fails to submit a substantially complete application after receiving notice from the

commissioner under section
245A.04, subdivision 1
;

(2) fails to comply with applicable laws or rules;

(3) knowingly withholds relevant information from or gives false or misleading

information to the commissioner in connection with an application for a license or during

an investigation;

(4) has a disqualification that has not been set aside under section
245C.22
and no

variance has been granted;

(5) has an individual living in the household who received a background study under

section
245C.03, subdivision 1
, paragraph (a), clause (2), who has a disqualification that

has not been set aside under section
245C.22
, and no variance has been granted;

(6) is associated with an individual who received a background study under section

245C.03, subdivision 1
, paragraph (a), clause (6), who may have unsupervised access to

children or vulnerable adults, and who has a disqualification that has not been set aside

under section
245C.22
, and no variance has been granted;

(7) fails to comply with section
245A.04, subdivision 1
, paragraph (f)
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or
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,
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(g)
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, or (j)
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;

(8) fails to demonstrate competent knowledge as required by section
245A.04, subdivision

6;

(9) has a history of noncompliance as a license holder or controlling individual with

applicable laws or rules, including but not limited to this chapter and chapters 142E and

245C;

(10) is prohibited from holding a license according to section
245.095
; or

(11) is the subject of a pending administrative, civil, or criminal investigation.

(b) An applicant whose application has been denied by the commissioner must be given

notice of the denial, which must state the reasons for the denial in plain language. Notice

must be given by certified mail, by personal service, or through the provider licensing and

reporting hub. The notice must state the reasons the application was denied and must inform

the applicant of the right to a contested case hearing under chapter 14 and Minnesota Rules,

parts
1400.8505
to
1400.8612
. The applicant may appeal the denial by notifying the

commissioner in writing by certified mail, by personal service, or through the provider

licensing and reporting hub. If mailed, the appeal must be postmarked and sent to the

commissioner within 20 calendar days after the applicant received the notice of denial. If

an appeal request is made by personal service, it must be received by the commissioner

within 20 calendar days after the applicant received the notice of denial. If the order is issued

through the provider hub, the appeal must be received by the commissioner within 20

calendar days from the date the commissioner issued the order through the hub. Section

245A.08
applies to hearings held to appeal the commissioner's denial of an application.

Sec. 4.

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[256B.044] ADDITIONAL PROVIDER ENROLLMENT TRAINING

REQUIREMENTS FOR HIGH-RISK PROVIDERS.

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Subdivision 1.

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Applicability.

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This section applies to any agency that provides a service

designated by the commissioner as high-risk under section 256B.04, subdivision 21. For

purposes of this section, "agency" means the legal entity that is applying to be or is enrolled

with Minnesota health care programs as a medical assistance provider according to Minnesota

Rules, part 9505.0195.

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Subd. 2.

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Mandatory training compliance.

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(a) Effective January 1, 2027, before applying

for enrollment or reenrollment as a medical assistance provider, an agency applying to

provide services designated by the commissioner as high-risk must require all owners of

the agency who are active in the day-to-day management and operations of the agency and

managerial and supervisory employees to complete compliance training. All individuals

who must complete training under this subdivision must repeat the training prior to

revalidation of the agency as a medical assistance provider.

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(b) New owners active in day-to-day management and operations of the agency and new

managerial and supervisory employees of the agency must complete compliance training

under this subdivision within 30 calendar days of becoming an owner of or employed by

the agency and prior to conducting any management and operations activities for the agency.

If an individual moves to another agency providing the same service and serves in a similar

ownership or employment capacity, the individual is not required to repeat the training

required under this subdivision. If the individual chooses not to repeat the compliance

training, the individual must provide the agency with documentation proving the individual

completed the compliance training within the provider revalidation schedule for the relevant

provider type as determined by the commissioner under section 256B.04, subdivision 21,

paragraphs (b) and (c).

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(c) The commissioner must determine the format and content of the compliance training.

The training must include the following topics, adapted as necessary for each provider type

subject to the requirements of this subdivision:

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(1) state and federal program billing, documentation, and service delivery requirements;

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(2) enrollment requirements;

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(3) provider program integrity, including fraud prevention, detection, and penalties;

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(4) fair labor standards;

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(5) workplace safety requirements; and

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(6) recent changes in service requirements.

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Sec. 5.

Minnesota Statutes 2025 Supplement, section 256B.051, subdivision 6, is amended

to read:

Subd. 6.

Agency qualifications and duties.

An agency is eligible for reimbursement

under this section only if the agency:

(1) is confirmed by the commissioner as an eligible provider after a pre-enrollment risk

assessment under subdivision 6a;

(2) is enrolled as a medical assistance Minnesota health care program provider and meets

all applicable provider standards and requirements;

(3) demonstrates compliance with federal and state laws and policies for housing

stabilization services as determined by the commissioner;

(4) complies with background study requirements under chapter 245C and maintains

documentation of background study requests and results;

(5) provides at the time of enrollment, reenrollment, and revalidation in a format

determined by the commissioner, proof of surety bond coverage for each business location

providing services. Upon new enrollment, or if the provider's medical assistance revenue

in the previous calendar year is $300,000 or less, the provider agency must purchase a surety

bond of $50,000. If the provider's medical assistance revenue in the previous year is over

$300,000, the provider agency must purchase a surety bond of $100,000. The surety bond

must be in a form approved by the commissioner, must be renewed annually, and must

allow for recovery of costs and fees in pursuing a claim on the bond. Any action to obtain

monetary recovery or sanctions from a surety bond must occur within six years from the

date the debt is affirmed by a final agency decision. An agency decision is final when the

right to appeal the debt has been exhausted or the time to appeal has expired under section

256B.064
;

(6) directly provides housing stabilization services using employees of the agency and

not by using a subcontractor or reporting agent;

(7) ensures all controlling individuals and employees of the agency complete annual

vulnerable adult training; and

(8) completes compliance training as required under
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section 256B.044,
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subdivision
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6b
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2
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.

Sec. 6.

Minnesota Statutes 2025 Supplement, section 256B.0701, subdivision 9, is amended

to read:

Subd. 9.

Provider qualifications and duties.

A provider is eligible for reimbursement

under this section only if the provider:

(1) is confirmed by the commissioner as an eligible provider after a pre-enrollment risk

assessment under subdivision 10;

(2) is enrolled as a medical assistance Minnesota health care program provider and meets

all applicable provider standards and requirements;

(3) demonstrates compliance with federal and state laws and policies for housing

stabilization services as determined by the commissioner;

(4) complies with background study requirements under chapter 245C and maintains

documentation of background study requests and results;

(5) provides at the time of enrollment, reenrollment, and revalidation in a format

determined by the commissioner, proof of surety bond coverage for each business location

providing services. Upon new enrollment, or if the provider's medical assistance revenue

in the previous calendar year is $300,000 or less, the provider agency must purchase a surety

bond of $50,000. If the provider's medical assistance revenue in the previous year is over

$300,000, the provider agency must purchase a surety bond of $100,000. The surety bond

must be in a form approved by the commissioner, must be renewed annually, and must

allow for recovery of costs and fees in pursuing a claim on the bond. Any action to obtain

monetary recovery or sanctions from a surety bond must occur within six years from the

date the debt is affirmed by a final agency decision. An agency decision is final when the

right to appeal the debt has been exhausted or the time to appeal has expired under section

256B.064
;

(6) ensures all controlling individuals and employees of the agency complete annual

vulnerable adult training;

(7) completes compliance training as required under
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section 256B.044,
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subdivision
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11
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2
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; and

(8) complies with the habitability inspection requirements in subdivision 13.

Sec. 7.
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MANDATORY COMPLIANCE TRAINING FOR CURRENTLY ENROLLED

HIGH-RISK MEDICAL ASSISTANCE PROVIDERS.
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The owners and employees of any medical assistance provider agency subject to the

requirements of Minnesota Statutes, section 256B.044, subdivision 2, and enrolled before

January 1, 2027, must complete initial compliance training by January 1, 2028. Owners and

employees of PCA and CFSS agencies who enrolled before January 1, 2027, and have

previously completed training under Minnesota Statutes, section 256B.0659, subdivision

21, paragraph (c), or 256B.85, subdivision 12, paragraph (c), are not subject to the initial

training requirements of this section but must repeat the compliance training prior to

revalidation as a medical assistance provider.

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Sec. 8.
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REPEALER.
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Minnesota Statutes 2025 Supplement, sections 256B.051, subdivision 6b; and 256B.0701,

subdivision 11,

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are repealed.

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APPENDIX

Repealed Minnesota Statutes: 26-07118

256B.051 HOUSING STABILIZATION SERVICES.

Subd. 6b.

Requirements for provider enrollment.

(a) Effective January 1, 2027, to enroll as a housing stabilization services provider agency, an agency must require all owners of the agency who are active in the day-to-day management and operations of the agency and managerial and supervisory employees to complete compliance training before applying for enrollment and every three years thereafter. Mandatory compliance training format and content must be determined by the commissioner and must include the following topics:

(1) state and federal program billing, documentation, and service delivery requirements;

(2) enrollment requirements;

(3) provider program integrity, including fraud prevention, detection, and penalties;

(4) fair labor standards;

(5) workplace safety requirements; and

(6) recent changes in service requirements.

(b) New owners active in day-to-day management and operations of the agency and new managerial and supervisory employees must complete compliance training under this subdivision to be employed by or conduct management and operations activities for the agency. If an individual moves to another housing stabilization services provider agency and serves in a similar ownership or employment capacity, the individual is not required to repeat the training required under this subdivision if the individual documents completion of the training within the past three years.

(c) Any housing stabilization services provider agency enrolled before January 1, 2027, must complete the compliance training by January 1, 2028, and every three years thereafter.

256B.0701 RECUPERATIVE CARE SERVICES.

Subd. 11.

Requirements for provider enrollment; compliance training.

(a) Effective January 1, 2027, to enroll as a recuperative care provider, a provider must require all owners of the provider who are active in the day-to-day management and operations of the agency and all managerial and supervisory employees to complete compliance training before applying for enrollment and every three years thereafter. Mandatory compliance training format and content must be determined by the commissioner and must include the following topics:

(1) state and federal program billing, documentation, and service delivery requirements;

(2) enrollment requirements;

(3) provider program integrity, including fraud prevention, detection, and penalties;

(4) fair labor standards;

(5) workplace safety requirements; and

(6) recent changes in service requirements.

(b) New owners active in day-to-day management and operations of the provider and new managerial and supervisory employees must complete compliance training under this subdivision to be employed by or conduct management and operations activities for the provider. If an individual moves to another recuperative care provider and serves in a similar ownership or employment capacity, the individual is not required to repeat the training required under this subdivision if the individual documents completion of the training within the past three years.

(c) Any recuperative care provider enrolled before January 1, 2027, must complete the compliance training by January 1, 2028, and every three years thereafter.