Cost Baseline and Impact AnalysisCost Baseline and Impact Analysis Abstract The Minnesota Department of Health was tasked with producing a n assessment of potential cost impacts of

1/18/2021

Cost Baseline and Impact Analysis

Assisted Living Licensure Statute

1

Table of Contents Cost Baseline and Impact Analysis ............................................................................................ 2

Abstract ............................................................................................................................. 2

Acknowledgements ........................................................................................................... 2

Executive Summary ............................................................................................................... 3

Methods and Assessment Overview .................................................................................... 4

Locations of Facilities Surveyed ........................................................................................ 5

Facility Capacity Cohort Summary .................................................................................... 6

Rurality .............................................................................................................................. 6

Facility Licensing and Compliance ........................................................................................ 7

Licensing Cost .................................................................................................................... 8

Campus Licensing .............................................................................................................. 9

Facility Management ........................................................................................................ 9

Minimum Facility Requirements ......................................................................................... 11

Door Locks ....................................................................................................................... 11

Kitchens ........................................................................................................................... 12

Additional Services .......................................................................................................... 14

Staffing ................................................................................................................................ 14

Training ............................................................................................................................... 16

Assessment ......................................................................................................................... 19

Termination ......................................................................................................................... 20

Nonrenewal of Housing .................................................................................................. 24

Facility Requirements ......................................................................................................... 24

Planned closures ............................................................................................................. 25

Preparedness Planning ....................................................................................................... 27

Training and Drills ........................................................................................................... 29

Missing Resident Review ................................................................................................ 29

Disease Prevention and Infection Control Review ......................................................... 29

Discussion............................................................................................................................ 30

Data Notes ...................................................................................................................... 31

Key References .................................................................................................................... 31

2

Cost Baseline and Impact Analysis Abstract

The Minnesota Department of Health was tasked with producing an assessment of potential cost impacts of the new assisted living licensure statute (Minnesota Statutes § 144G.08—144G.9999) and associated rules (Minnesota Rules Section 4569) for implementation in August 2021. Existing facilities had been registered as a housing with services establishment (registered under Minnesota Statutes Chapter 144D) and worked with or provided services with arranged home care providers (licensed under Minnesota Statutes Chapter 144A). These facilities have provided assisted living services to residents under Minnesota Statutes § 144G.01—144G.07. Rule impacts were then provided with the associated Statement of Need and Reasonableness. To assess the impacts of the statute, the Department and partners deployed an online survey of Housing with Services establishments to assess current state and existing costs related to key provisions of the statute and rules that could create new or changed costs. The survey received over 1,000 engagements, resulting in sufficient response to provide confidence in representativeness. Based on the analysis of responses, the estimated costs to providers of assisted living services of adapting to the statute and rules averages $7,000 total. Larger facilities face cost increases that scale with their staff and resident population. These costs are most impactful on facilities licensed for fewer than fifteen. Some areas of statute and administrative requirements could result in adaptive responses by providers to limit resident numbers in existing facilities, increased facility specialization in either assisted living or assisted living with dementia care, and possible closure or restructuring of facilities.

Acknowledgements

This study was a cooperative project through the Minnesota Department of Health’s Health Regulation Division (MDH-HRD), Minnesota IT Services (MNIT), and Civic Intelligence LLC under contract number 184199. With gratitude, the team and its key supporters were:

• MDH-HRD o Lindsey Krueger o Katherine Chickey

• MNIT o Cindy Le o Cristyn Rybak

• Civic Intelligence LLC o Jeremy Peichel, Principal o Vincent Peichel, Statistician o Derrick Miedaner, Policy Analyst o Graham Guenther, Policy Analyst

3

Executive Summary

An email survey from the Minnesota Department of Health was delivered online to the 2,391 registered housing with services facilities via listed email on November 25, 2020 and served as the primary source of cost analysis data. A total of 1,060 contacts for facilities engaged with the email and 84 percent of them provided some level of response providing a pool of 696 complete target responses. The results of the facility response and data analysis were grouped topically to assess the baseline cost or commitment of facilities from the survey against the changes to requirements codified in the Minnesota Statutes Chapter 144G. The sample size was sufficient to allow several cross-sectional views to assess differential cost impacts by state region, facility size defined by capacity and grouped in cohorts, and likely equivalent license category of assisted living facility or assisted living facility with dementia care. Two-thirds of the respondent facilities were concentrated in the seven-county Twin Cities Metropolitan Area. One-third of respondent facilities provided assisted living with dementia care.

Cost increases can be derived from either the facility level, or the employee level, for both hard dollar and soft dollar expenditures. The primary drivers of cost increase evidenced from the data are policy conversion (increase of $1,000 - $1,300 per facility), training (increase of $100 per staff member at orientation), and resident assessment (increase of $200 for the average facility and $10 per resident assessment). For the few facilities (6 percent) where they do not provide 24-hour awake staff, or 11 percent that do not provide three meals per day to residents, their costs can increase significantly as they adapt to minimum standards adding personnel, training, and planning that could exceed $50,000.

Many areas areas of the statute are catching up to current practice and will have no meaningful cost increase. These areas include door locks, minimum service levels, and staffing of nurse supervisors and facility managers.

Due to the statute changes which simplify compliance costs for licensure, facilities previously regulated by both housing and services statutes will typically realize cost savings under the new statute. Additionally, there is further potential for licensure cost savings due to the campus-based licensing available under the new statute. Facilities with fewer than 50 residents are likely to see a decrease in license costs as a result, along with a decrease in staff time complying with requirements and meeting survey demands in the long term.

Some cost categories are highly contingent on facility, resident, and circumstance and therefore not as meaningful to quantify in terms of average cost impact. Additional costs for values at risk related to food preparation and mandatory waiting periods for termination, appeals, nonrenewal of housing and planned closures, for example, could place significant cashflow challenges for facilities. Smaller facilities without a corporate managing entity could see timing and cashflow challenges harm their business model and require closing. The average assisted living facility with 23 residents could expect a net increase in cost of $5,100 from the statute and at most $4,383 from the rules. The average assisted living with dementia care facility with 53 residents could expect a net increase of $20,260, again with at most $4,383 from the rules.

4

Methods and Assessment Overview

In July of 2020, MDH contacted home care providers to assess their concerns about the conversion to assisted living licensure and assess their intent to convert. That survey was delivered online through the Improved Customer Service Delivery tool and collected 439 responses, with over 80 percent of responding providers indicating their intent to convert to either assisted living or assisted living with dementia care. The survey also provided the options to share concerns about costs and refining the data collection needs for this cost baseline. In response to a legislator’s request and the findings in that initial home care survey, the Minnesota Department of Health collected information about current industry practices to assess the costs of implementing the assisted living licensure statute. For each registered housing with services establishment, the department requested information associated with their unique health facility identification (HFID) number. These data were analyzed to determine the baseline costs of operation and assess gaps in practice from statute mandates. These gaps were then assessed on financial risk or cost impacts on facilities, grouped by size, location, and other factors, as they convert under the licensure law beginning August 1, 2020.

The survey was delivered online to the 2,391 registered housing with services facilities via listed email on November 25, 2020 with a reminder going out to incomplete responses on December 7, 2020. The closing date was December 18, 2020, however late responses were accepted through December 31, 2020. A total of 1,060 contacts for facilities engaged with the email, 84 percent of them provided some level of response, and a pool of 696 facilities provided complete responses. An additional 77 facilities received the survey but did not offer assisted living services, so their responses were excluded from the dataset. Additional notes regarding data are available in the Data Notes section at the end of the report. Profile of facilities is located in Table 1, illustrating the distribution of facilities that responded by their self-reported combination of services provided. Table 1: Count of complete responses by combination of services provided to residents.

Two-thirds (67 percent) of respondents provide assisted living services to residents and would be assumed to convert to an assisted living facility license. The remainder of respondents provide dementia care or listed that they provide assisted living with dementia care and would be assumed to convert to an assisted living with dementia care license (33 percent). Only ten respondent facilities reported providing exclusively dementia care services. There is the possibility that respondents only see their dementia care services as existing in the context of assisted living, potentially causing an overreport of facilities that offer both care types. These distinctions will be important in the licensure application, as each carries a different base fee and per resident rate. If licensing as a campus, the applicant may request different licenses for

Facility Services Alone Independent

Living

Independent Living and

Nursing Home Nursing Home

Nursing and Transition Swing Bed Total

Assisted Living 402 42 4 19 0 467 Dementia Care 10 0 0 0 0 10

Both 169 39 2 (1 also has transition beds) 8 1 219

5

each building, or license the whole campus as the higher tier assisted living with dementia care license. Throughout this report, where average facility and other references are noted, this breakout of one-third assisted living with dementia care should be considered when viewing cost assessments that don’t specifically isolate license type impacts. For assisted living facilities with dementia care, the costs can generally be assumed above that reported average and the inverse for facilities seeking the assisted living facility license.

Locations of Facilities Surveyed

Respondent facilities were distributed across the state with sixty to seventy percent of the facilities for each concentrated in the seven-county Twin Cities Metropolitan Area. A heat map of respondent locations can be seen in Figure 1. The respondent facilities were highly

Figure 1: Heat map of valid and branched out responses to survey.

6

concentrated in the state’s key population centers with the majority located in the seven-county Twin Cities metropolitan area. Significant response concentrations were evident in the Greater Minnesota cities of Rochester and Duluth and to a lesser extent, Albert Lea, Willmar, Brainerd, and Mankato. The darker zip code regions on the map show where housing with services providers responded but were not providing assisted living or assisted living with dementia care services. Overall, the response distribution appears to reflect the geographic diversity found in facilities and is assessed as representative of the size and geographic diversity found in currently operating facilities, with more detail in the Data Notes section.

Facility Capacity Cohort Summary

Facilities responding to the survey were presented with values for their housing with services registration that listed their reported current occupancy and their registered maximum capacity. With the transition to a licensure system, these data will be critical in determining the expense of the license. To accurately assess the cost impacts of licensure, respondents were asked to review the data from the state system and confirm its accuracy. Respondents had mixed success in addressing this correction; the data below reflect the Housing with Services registered or respondent corrected capacity numbers to assess the capacity cohort of survey respondents. Respondents whose data were missing or invalid were excluded resulting in 566 total responses as the starting point for assessments throughout this report that utilize size as a determinant of cost impact. For effective assessment of costs, the responding facilities were divided into cohorts based on their capacity, with micro facilities tailored to exemptions listed in statutory requirements and other facility divisions set to relatively equal cohort size. The distributions are listed in Table 2. Table 2: Distribution of facility capacity cohorts by Metro and Greater MN.

CAPACITY COHORT

TWIN CITIES METRO

GREATER MN

GRAND TOTAL

1-5, MICRO 154 11 165 6-15, SMALL 79 64 143

16-50, MEDIUM 22 113 135 50+, LARGE 57 66 123

GRAND TOTAL 312 254 566 Rurality

As indicated in the previous sections, respondent facilities were largely concentrated in the seven-county Twin Cities metro area, and distribution across facility sizes was relatively even. The responses of micro facilities with five or fewer residents was highly concentrated in the Twin Cities metro area, which reflects the common nature of those facilities as converted single-family residential units. Additionally, some respondents indicated that small facilities can be separate facility entities managed by common home care providers and/or common facility management entities. In these collectively managed units, operations are constrained with a small individual facility budget have a smaller dedicated staff contingent or shared staff across multiple facilities. Their case is unique and likely to face additional costs in adapting to increased requirements or administrative rigor with already stretched senior, skilled, and licensed staff. More generally, micro facilities’ small relative size makes them less likely to know

7

or participate in networks, associations, or have robust internet presence to communicate with potential residents and families. These facilities, as largely urban in location, are more likely to lean on community resources for emergency response and assistance, as indicated with several respondents stating that their emergency plan was to “dial 911.” Distribution of these facilities and the proportion that declined to provide capacity information is shown in Figure 2.

Rural facilities appear to have a higher threshold for population with comparatively few responding facilities falling into the micro category. Economically, they seem to require more independent operation and are less likely to benefit from shared staff across multiple micro locations. Rural facilities are dominated by medium establishments with between 16 and 50 residents composing almost half of the rural responses (43 percent). These differences in urban and rural response rates can inform interpretation, as response bias in the survey can undermine some of the conclusions if facilities of a certain type consistently provided incomplete data, had accessibility issues, or other challenges prevented sufficient or valid collections. Due to the excellent response rate and the large size of the sample, conclusions are likely to be representative at a 95 percent confidence level and biases are assumed to be overwhelmed when assessing average impact across all facilities, or dividing facilities into capacity cohort, presumed assisted living facility license type, or state region.

Facility Licensing and Compliance

Because assisted living facilities vary widely in their building size and types, key elements of the statute will have different impacts. Purpose-built housing with services that provides assisted living with or without dementia care services will have an easier time meeting certain mandates than an adapted use of a preexisting facility such as a single-family residence. Adaptive use is the case for most providers in the micro category of five or fewer residents. These facilities were acknowledged in the statute with exemptions from various requirements

Figure 2: Distribution of total complete response across capacity cohorts by Twin Cities Metro and Greater Minnesota.

8

to recognize both their smaller size and their limited staff capacity to adjust to significant regulatory burdens and operational demands, particularly in converting repurposed buildings into assisted living facilities.

Licensing Cost

The total fees for assisted living services under prior statute were variable as it combined the cost of housing with services registration (Minn. Stat. § 144D.08) of $155 per facility and the costs of the home care services license (Minn. Stat. § 144A.472) of between $200 and $7,651 per year. Those fees were calculated based on revenue, but that fee may have been effectively spread across services at multiple housing with services establishments if collectively managed or served home care across multiple locations. The statute changes simplify facility-level compliance for licensure by providing a fixed fee for facilities of $2,000 for assisted living and $3,000 for assisted living with dementia care. Additionally, facilities will pay variable costs based on licensed capacity of $75 per resident in assisted living and $100 per resident to provide assisted living with dementia care. Under the statute, facilities that provide a secure dementia unit and operate with any combination of assisted living, must be licensed as assisted living with dementia care (Minn. Stat. 144G.10, Subd. 2(b)). Respondent facilities indicated that two-thirds of facilities would apply for licensure under assisted living and the other one-third would apply for assisted living with dementia care as indicated in Figure 3. Due to the high variability of baseline costs under the more complex system that currently exists, it is not possible to generalize where cost increases may exist, and for the average facility, the expenses to maintain licensure under the new statute will likely be reduced.

For example, a micro facility currently providing assisted living services for five residents in Brooklyn Park files to transition their license. This hypothetical facility is a housing with services establishment that is also the home care provider for the residents and operates no other facilities. This facility would save at least $500 in fees to license as an assisted living facility, as their new license combines registration for housing and assisted living delivered comprehensive home care services into their single assisted living facility license. In contrast, another hypothetical facility, this time a medium facility in Brainerd serving 29 assisted living residents and operating a 20-bed secure dementia wing would see renewal costs increase from a combined $7,806 under the current statute maximum (Minn. Stat. § 144A.472 Subd. 7(e) and § 144D.03) to $7,900. The whole facility would be registered under the assisted living with

Figure 3: Number of responses by facility license type and state region.

9

dementia care license and its associated per-resident rate. While marginally higher, the single license is simpler than the dual registration and license with guidelines for assisted living under the previous statutes. In general, costs per facility under the new assisted living licensure statute would be expected to increase for:

• Independent assisted living facilities with 78 or more residents. • Independent assisted living facilities with dementia care with 49 or more residents. • Conglomerate operations that benefitted from economies of scale for home care

licensing under previous statutes but cannot form a campus under new law.

All other facilities that are outside of those groups would see a decrease in registration fees per facility.

Campus Licensing

Licensing costs are further reduced by the allowance of campus-based licensure. Where facilities under the existing statutes were independently registered based on physical address, the new assisted living licensure statute allows adjacent or common property buildings and facilities to apply under a combination of facility-based licenses or whole-campus licenses. Campus licensing is subject to MDH approval and would reduce fixed costs of the license fee and compliance time by streamlining licensures of multiple facilities to align with a common management model. Based on the responses received, at least half of all facilities have a common management contact or organization with one or more facilities. While greater spatial analysis of existing data could assess the scale of potential savings, ultimately the decision to consolidate is up to the applicant and subsequent approval by MDH. Of those facilities where a common management contact was identified, half of those facilities are also located in the same zip code, indicating that no more than one quarter of all assisted living facilities could form a campus shown in Table 3. While not the statutory criteria of a campus license, it indicates that campus licensing may compose a meaningful portion of the licensed facilities, reducing the costs of compliance, management, and monitoring for facilities and MDH.

Facility Management

For facilities that are not a campus, shared management by a single housing manager occurs in at least 17 percent of facilities as shown in Table 4. Compliance management, including policy

Table 3: Possibility of campus formation by common contact and zip code for facilities by resident capacity cohort and unknown.

Table 4: Presence of housing manager by resident capacity cohort, including unknown.

10

development, state filings, training, and operations oversight is mostly performed by local facility managers in all but the smallest cohort of facilities in the state. In the smallest cohort, the compliance management responsibilities are roughly equal between local staff and a higher echelon corporate manager as shown in Figure 4.

The presence of centralized management in assisted living across the state provides economies of scale in policy development, training and care tools, and compliance with recordkeeping requirements. Throughout this analysis, when reviewing cost data it is worth recognizing that the corporate managed proportion of facilities will confront smaller per facility costs on average and may even find savings where others see cost due to the simplification of mandates and standardization imposed by the assisted living licensure statute and rules. Regardless of structure for managing policies and compliance, facilities operating assisted living will have to maintain policies regarding infection control, tuberculosis, background checks, recordkeeping and others, with dementia care licensed facilities responsible for additional policies specific to additional needs with dementia care. These policy requirements have some parallels to pre-existing requirements, but would require facilities to refresh them to reflect the updated mandates and provide more detail in new subject areas. Facilities are also required to provide copies of all policies and procedures to new residents and representatives at move-in. The estimated effort for assisted living facilities is at least 32 hours of facility manager time to familiarize themselves with the new language regarding policies and then adapt existing policies to match, followed by annual review time on policy and procedures of at least 16 hours. For facilities providing dementia care, the time burden is an additional 10 hours initially and annually to incorporate additional requirements for assisted living with dementia care and maintain policies once established. This does not include preparedness planning, infection control, and missing resident efforts, which are discussed in the Preparedness Planning section.

Facilities can expect to expend at least $1,100 on time in Greater Minnesota and $1,300 in the Twin Cities to meet the standards (Minn. Stat. § 144G.41, Subd. 2). That assumes performance by the facility manager or equivalent senior staff and their modifying existing policies that were already required under previous law. Facilities that intend to license for

Figure 4: Self-reported compliance contact for facilities by capacity cohort.

11

dementia care will expend an additional $300 to $400 in time to incorporate the dementia care requirements and policies (Minn. Stat. § 144G.82, Subd. 3). For the few facilities that reported having a part-time or no dedicated housing manager, these requirements may be burdensome as they represent additional work for staff not typically fulfilling these roles or limited in their engagement on facility administration issues. The vast majority of the effort is in becoming familiar with the requirements under the statute and rules, then applying the differences to policy implementation and requirements. There is significant overlap with housing director continuing education requirements and the work required to adapt policy and facility materials to the new statute language, placing training into practice immediately after completion.

Directors have responsibility for training beyond becoming familiar with the statute and rules. The requirement of 30 hours of training every two years continues under the new statute, imposing no new costs. Enhanced under the new law is training for directors of assisted living facilities with dementia care. Those directors are required to maintain greater familiarity with dementia care needs through increased mandatory annual training at 10 hours per year from a previous 8 (Minn. Stat. § 144G.82, 144D.10), resulting in an increase of $70 to $180 of staff time. Additionally, creation and requrement of director licensing for both facility license types imposes new costs either to directors or their facility if part of the employment agreement. Currently, the Board of Executives for Long Term Services and Supports offers five paths to licensing, with costs from $238 to $758. As of the date of this report, rules for the director licensing under Minn. Stat. § 144A.20 are not published and are outside the scope of this analysis, however cost impacts are expected to be less than $1,000 and develop greater professionalization in the field of assisted living housing directors.

Minimum Facility Requirements

The assisted living licensure statute continues the requirement of sharing a disclosure of services provided to prospective residents but adds two additional components: providing a Uniform Checklist Disclosure Form and provision of an oral explanation of services offered under a contract. The disclosure form includes a requirement for MDH to consult all interested stakeholders, imparting a burden of review and comment to any interested parties voluntarily submitting feedback on the design of the uniform checklist. This is comparable to preexisting requirements under Minn. Stat. § 144G.06 but does produce an initial familiarization burden when facilities adapt to the new services form. One hour of familiarization and an additional hour of compliance materials and recordkeeping per year would apply each time the form changes, at a cost of between $35 to $180 per licensed facility or building if multiple buildings vary within a given campus license. Additionally, the statute requires oral explanation of contract services, which demands additional time for each prospective resident, but is within expected activities in meeting with families and prospective residents codifying a preexisting activity performed during contract and new resident due diligence.

Door Locks

The statute continues the requirement to have door locks for residents and, for at least 94 percent of facilities, locks are already provided with no charge to the resident. This requirement carries no additional cost, and most facilities are already in compliance. For those few facilities not providing locks, their estimated time and material cost is $50 per resident.

12

Kitchens

Management of kitchens is a critical component of the new statute that, for larger facilities, reduces their inspection burden by rolling their kitchen inspections into the assisted living licensure. Additionally, the greater meal provision becomes a part of the standard minimum service offerings, providing market advantages to larger facilities. Most facilities have an on-site dedicated kitchen, but that kitchen is either unregulated as a component of the facility, or receives a food license from the state, as indicated in figures 4 and 5. Those unregulated kitchens are most often found in the micro cohort, indicating they are often unlicensed kitchens in a converted single-family residence.

Based on that circumstance, the facilities most likely to have cost impacts under these new requirements for kitchens are the small and micro providers that operate unlicensed food preparation or provide access through other means. These kitchens will fall under food code

Figure 5: Kitchen regulation type by resident capacity cohort

Figure 6: Kitchen type by capacity cohort

13

regulations for preparation and serving and will need to take time to familiarize themselves with procedural changes. Though the previous home care statute did require training in food preparation and food safety, the food code requirement is more specific and thorough. Including their kitchen in the assisted living licensure ends up producing a cost to comply with training and regulations requirements of at least four hours for each employee handling food, for a total trainer and trainee salary cost of between $140 and $300 based on the number of employees managing food at these facilities (Staffing section has more detail on employee numbers at micro and small facilities). Facilities where the kitchen is already regulated will see no change in their requirements, potentially realizing cost reduction from no longer requiring a separate food beverage license and the streamlining of compliance and inspection activities. In terms of food access, residents continue to have the right to access food at any time under the new law, generating no new costs.

In addition to the new regulatory environment, the statute expands the minimum service level of kitchens requiring resident engagement and more forward-looking menu and alternatives planning. Where facilities are providing their two existing meals per day, much of this preparation already occurs and the codification of time periods and resident involvement is not impactful to operations in a way that generates costs. Costs increase do occur with the provision of seasonal fruits and vegetables, if none was provided before, and increasing meal standards from two to three per day. Meal purchase cannot be required in the contract, but the facilities can collect payment for meals received from residents, visitors, and others. These requirements require more time in trained staff coverage to prepare and serve food, but not necessarily greater meal costs.

Extending the kitchen preparation to provide a third meal adds at least five hours of food code trained staff every day to prepare food for a salary cost of $27,375 annually that would be offset by meals purchased. The absence of a contract requirement means that smaller facilities face more risk on cost recovery if the statute requires them to make meals available but their pool of residents opts-out at a rate that makes food preparation a losing requirement. Innovative meal provision options such as meal kits, shared kitchens, and outsourcing one or more meals to restaurants and public facilities may reduce the cost and risk to providers in preparing the additional meal. As with the kitchen regulation, this meal provision cost is greater at small facilities, while the costs at larger facilities are harder to isolate through alternate menu options, food waste, and the coordination and balancing of resident input in meal planning process. That said, most facilities are already providing three meals per day as shown in Figure 7 and will be unaffected as the statute catches up to existing service standards.

Figure 7: Facilities that provide three meals per day.

14

Additional Services

Many services previously required under assisted living or assisted living with dementia care are maintained among the minimum service levels including access to a nurse, housekeeping, laundry, transportation support, and connecting to community resources. Expanded in the new statute are the socialization programs, which are required to be culturally sensitive and provided with a daily program of social and recreational activities based on individual and group interests, physical, mental, and psychosocial needs connecting with the community at-large. Data were not collected on the classes of activities provided for residents; however, the requirement for socialization remains consistent and includes statutory guidance, so no additional cost is anticipated for facilities.

Staffing

Staffing levels for a facility are dependent on resource availability and resident needs appropriate to the facility and demand. The assisted living licensure statute and rules formalize the process of setting staffing for facilities, requiring a planning document that includes semiannual evaluations and ensures that 24-hour needs of residents are met based on their individual assessments. Assessments are discussed more in the next section, but the goal is person-centered planning taken to the facility level to ensure the facility staff can respond promptly and effectively to scheduled and reasonably foreseeable needs as well as individual emergencies or facility-wide emergencies, life safety, and disaster incidents. This planning and evaluation requirement mandates documented consideration to individual and collective needs and may already be carried out to some extent in facilities. Anecdotally, some facilities indicated that the challenge with planning staffing levels is not understanding the needs of the residents or the response capability of the facility, but instead addressing the shortage and turnover of employees. Resource planning scales with facility size and includes elements from the later preparedness and assessment sections.

Time to plan staffing needs for each resident would take at least 15 minutes per staff member in matching competency and availability to resident needs and assessed service requirements. Each facility’s emergency preparedness plans would detail the staffing capacities needed for emergencies and would augment the staffing minimums per shift once accounting for all residents’ scheduled and reasonably foreseeable unscheduled needs. Matching capabilities to needs to ensure adequate skills coverage would require balancing staff schedules and needs, demanding more time from both the nurse supervisor on the care side and the facility manager overall. Because facility staff scheduling is already accomplished, the additional workload is in documenting the evaluation of staffing needs and capabilities and requires at least one hour of nurse supervisor time for every four residents each review, at a minimum twice a year. This amounts to a minimum cost of $140 for a rural facility with four residents and a small staff each year. A larger facility of 70 residents would require $1,200 to $1,500 in supervisor time to document and review staffing plans each year. If a facility experiences significant turnover in staff and/or residents, it is reasonable to assume that more frequent staffing plan evaluation on a quarterly basis to reflect updated assessments and ongoing staff competency evaluations. If a facility conducts reviews quarterly, that exceeds the mandated frequency, but meets the standards of ensuring substantial compliance with the staffing

15

requirements of Chapter 144G. The resulting costs of quarterly review would be at least $280 in staff time for a rural facility of four residents and the large facility would expend at least $2,400 in staff time.

Overseeing the staffing plan and its execution for care staff is the nurse supervisor, who is full-time at most facilities as shown in Figure 9. The facilities that indicate no nurse supervisor may be using a different title resulting in confusion on response, as each facility on average has at least one fulltime equivalent registered nurse. Another response error comes with smaller staffs and multiple roles served by each person, if the registered nurse serves as facility manager and nurse supervisor respondents may have listed part-time for each role when asked. The typical micro facility has seven total fulltime equivalents, with small facilities having 12 fulltime equivalents on average. Medium and large facilities carry more diversity in actual facility size, but average 15 and 31 fulltime equivalents, respectively. Staffing averages are shown in Figure 8, with the displayed values representing

Figure 8: Fulltime equivalent employee averages by capacity cohort

Figure 9: Nurse Supervisor Status

16

average fulltime equivalents for each role: nondirect care staff, direct care staff, and LPNs at the average facility of each cohort. As mentioned earlier, each facility averages one fulltime equivalent RN with the total staffing by cohort:

• Micro facilities serving 1 to 5 residents average 7 to 8 fulltime equivalents. • Small facilities serving 6 to 15 residents average 10 to 11 fulltime equivalents. • Medium facilities serving 16 to 50 residents average 15 to 16 fulltime equivalents. • Large facilities serving over 50 residents average 31 fulltime equivalents with larger

variation.

Twenty-four-hour awake staff was provided by 94 percent of the responding facilities, providing a baseline of around the clock care that already appears to comply with statute provisions. The addition of 24-hour access to on call nurses is consistent with preexisting requirements and has no additional cost implications for facilities that are already in substantial compliance. Facilities with 12 or fewer residents were previously exempt from the awake staff requirement (Minn. Stat. § 144G.03, Subd. 3) producing a new requirement for awake night shift at a minimum cost of $54,750 ($15 per hour, 365 days salary-only estimate). Cost savings are limited with this part of the statute; however, of facilities that indicated they did not provide 24-hour awake staff, one-third of them were commonly managed. If proximity and response time would meet the 10-minute standard (Minn. R. 4659.0180, Subp. 6), those arrangements could see a reduced per facility cost of adapting to the new standard by having awake staff cover multiple buildings. The exception here is secure dementia units, where awake staff must “be present in the secure unit at all times” (Minn. Stat. § 144G.81, Subd. 4).

Training

Training standards are divided into assisted living facility staff or assisted living facilities with dementia care staff, and further classified by orientation or annual training. Prior standards allowed assisted living housing with services establishments to maintain a lower four-hour dementia training orientation standard. Facilities that served residents with dementia maintained a standard of eight hours of dementia topic orientation. The statute has since removed that difference, standardizing for all assisted living facilities the eight hours of dementia care training, providing unlicensed direct care employees with at least four hours of additional training at orientation. For the average facility, the estimated cost of this additional four hours of dementia care training is estimated to average $60 per staff member per orientation. Total costs to facilities based on the staffing averages across cohorts and using a $15 per hour direct care staff wage are in Table 5. This is the initial cost, with additional orientations due to staff turnover increasing the costs accordingly.

Table 5: Cost of enhanced training requirements for assisted living facilities. Capacity Cohort Direct Care Staff Cost 1-5, Micro 4.65 $279.25 6-15, Small 7.66 $459.74 16-50, Medium 12.39 $743.56 50+, Large 19.28 $1,156.72 Average 10.52 $631.12

17

For 84 percent of facilities, standardization of training delivery and compliance is achieved through use of online platforms. Systems such as Relias, EduCare, and others provide consistent training experiences instructing unlicensed and licensed staff in regulatory requirement. That covers the documentation, consistent delivery, and knowledge checks. Because most facilities already license these training systems, the costs of additional training modules for continuing education, annual refresher training, and other standard knowledge requirements are likely to be comparatively small and included in the sunk cost of platform license to meet preexisting training requirements. Some providers even utilize multiple systems, and all providers utilize some amount of non-online training methods for skills competency evaluations, resident orientation, and facility orientations. While these systems are helpful in standardizing asynchronous compliance training delivery, records of performance, and certificates, they are not the complete training picture.

The skills and competencies appropriate for unlicensed direct care staff require competent performance and sign-off by a nurse or licensed health practitioner within the past two years. There are also requirements to have their skills checked by licensed staff periodically. In telephone interviews and in the survey, assisted living facilities largely conduct these skills checks on a regular basis and make spot corrections as required to ensure care is consistent and staff are competent in their roles. The competency skills check requires significant effort and documentation of training during the initial hire period before the unlicensed staff member can perform direct care duties. Many facilities reported spending several days to two weeks depending on the preexisting knowledge and skills of staff. There is not anticipated additional cost associated with these training standards since the list is defined in statute but was largely operationally applied by assisted living facilities already to match care skills with resident needs. All the required skills are consistent with the requirements under comprehensive home care statutes creating little to no increase in training burden for staff.

Figure 10: Dominant online training platforms used to meet mandatory training requirements.

18

The training level of effort is widely variable across facilities with larger facilities typically investing more in orientation of staff and facilities with dementia care taking more time to address the larger family of requirements. The enhanced skills checklist is a finer specification but was not substantially different from what was already required and only imposes new costs on facilities if they were not sufficiently documenting the existence of the training program, competency checks, and maintaining a record or training performance with certificates of completion. Some respondents, likely identifying the origin of the survey as their regulating body, provided answers such as “as much as required by the rules.” Suggesting that reliability of these training hour reports may be lower than other areas of the survey. This response also indicates a challenge in a survey originating from a regulatory agency, where respondents may be inclined to answer questions as they believe the agency wants to hear rather than operational realities. Despite that, the data that were received indicate that most facilities are exceeding the minimum training requirements in number of hours and are conducting and including their skills checks. Some facilities did report that their annual training was accomplished through skills observation and assessment continuously in addition to annual refresher courses.

In summary, the increase in training burden amounts to:

• Directors of assisted living facilities with dementia care increased by two hours of dementia topics.

• Direct care staff in assisted living facilities increase their dementia topic orientations by four hours.

Figure 11: Training hours for direct and nondirect staff orientations and annual training by capacity cohort and license type.

19

Assessment

Most facilities (98 percent) already report having their registered nurse on staff performing the assessments when residents start, and half of respondents provided information about the software tools utilized in the assessment process. Two tools stand out as most common with 57 percent of assisted living facilities and 31 percent of assisted living with dementia care facilities using some form of ResiDex’s tools including RTasks. An additional 18 percent of assisted living facilities used Eldermark (the favorite among assisted living facilities with dementia care at 49 percent). In Figure 12, the most common reported software tools are shown with assisted living usage on the outer ring and assisted living with dementia care on the inner ring.

Reported use of assessment software was only from half of respondents (Table 6), indicating either an unwillingness to share the details of the software used, or a significant gap in software-based assessment tool utilization. That does not necessarily mean that the 36 percent of facilities not currently using software are not utilizing uniform tools to cosistently document the needs and records for each resident. The proposed rules (Minn. R. 4659.0150, Subp. 2) enhanced the statute by specifying the fifteen key areas where uniform assessment assists with both person-centered care planning and facility-based resource allocation in the staffing plan. These elements could be adapted by individual facilities into a packet of checklists or worksheets that allow hard-copy assessments if software is not their preference. The costs of

Figure 12: Double doughnut with the assessment software preferences of 243 assisted living facilities (outer) and 167 assisted living with dementia care (inner) facilities.

Table 6: Adoption rate of assessment tools by capacity cohort.

20

adapting the rule requirements for a hard copy checklist and worksheet set would take a nurse or other licensed health professional no more than five hours. Given that assessments were already occuing under prior law, assembling materials should take a staff cost of less than $200 for the average facility, with printing and copies to apply the uniform assessment worksheet adding an additional $10 per resident assessment. These costs should be offset by the organization’s value that matches the uniform assessment tool with the service provision in the assisted living environment. The tool will save assessment time in searching and gathering disparate components by gathering them into a single tool, if one is not already in use.

If a facility opts to convert to a software solution, costs by provider size are listed in Table 7. These software solutions are costly to implement, but provide advantages through electronic health records and record management, which is why there is significant investment in staff training to gain full value from conversion to electronic

records. Given the investment cost in both software, staff time and training, many smaller facilities may find it cost prohibitive to adopt this solution. Some facilities did indicate support for these expenses from a higher corporate echelon and either did not report the software costs or indicated the reported cost was paid by the managing entity.

The new statute maintains the in-person standard for assessments, while allowing virtual medicine for assessment via telecommunications methods in specific circumstances. The rules provide clarity that maintain practice standards of person-centered planning and care delivery. In contrast, the previous mandate (Minn. Stat. § 144A.4791, Subd. 8) required in-person assessment by a registered nurse with only reassessment and monitoring available through telecommunications. Where geographical distance, urgency, or other unexpected circumstances exist, this technological allowance prevents those obstacles from delaying the resident’s transition to safe housing and care.

Termination

The statute defines termination as facility-initiated action terminating housing or all assisted living services received under the contract. Previous mandates were scattered among several statute areas and governed by the housing and services contracts, leading to challenges in administration and uncertainty in the governing law when a contracted home care provider terminates services with a resident, but is the service provider of choice for a housing with services facility providing assisted living. Three different areas of statute interact under the previous model, now consolidated into the single assisted living licensure statute, reducing costs for administration and compliance, while ensuring resident rights and due process requirements are consistently applied to lawful terminations of assisted living services and/or nonrenewal of contracted assisted living housing. Additionally, the statute enhanced requirements for coordination of moves and relocation support for assisted living clients to ensure needs are met at the new facility and continuity of care and recordkeeping is preserved

Table 7: Average costs of software assessment tools and training by capacity cohort.

21

as much as possible. The largest changes under the statute are the implementation of a pretermination meeting; shifting the discussion of planned termination from within five days of notice (Minn. Stat. § 144A.442) to at least seven days prior to issuing the notice (Minn. Stat. § 144G.52 Subd. 2b). Additionally, the pretermination meeting notice must be served at least five business days in advance of the meeting (Minn. R. 4659.0120). The statute further requires residents be able to invite additional representatives beyond the standard attendees: resident, legal representative, designated representative. The written summary and agreements reached in the pretermination meeting requires up to 1 hour of administrative time to accomplish at an average cost of $35 (Minn. R. 4659.0120).

The termination meeting itself is not a new meeting requirement, but it was previously held after the termination notice was issued. It does extend the period of termination planning by at least two weeks before the termination notice period even begins. At an average daily cost of $131 for assisted living, and $165 per day for dementia care, facilities awaiting termination for nonpayment or other cause could have two or more weeks of housing or service payment at risk for an additional $1,834 for assisted living or $2,310 for dementia care under statutory requirements. The notice also must include more detail than the previous basis of “reason for termination,” adding the burden of a detailed explanation including clinical and supporting rationale, conditions for a new or amended contract, and the appeal and move coordination process. The appeal and move coordination are addressed in the next section. The requirement for additional clinical and supporting evidence results in a thorough and standardized documentation of termination reasons, and without reviewing existing termination notices, it is challenging to assess the current quality of termination notices. The survey asked respondents if they perform discharge planning for residents, covering the entire process of termination notices, meetings, documentation, and move coordination, with supplemental questions to gather more detail on move coordination.

Of the 696 facilities with complete responses, 578 or 83 percent provide some level of discharge planning if there is need to terminate services or housing. Many facilities described the process in the abstract in their response, as their facility had not yet performed these

Figure 13: The number of facilities performing discharge planning by capacity cohort and whether they also provide relocation assistance.

22

functions; those data were left out of the following and are why the number of respondents is lower than the total complete of 696. Among the 578 facilities that reported performing some amount of discharge planning for termination of services and/or housing, an additional 432 or 62 percent of all facilities provide some amount of relocation assistance. These results are broken out by capacity cohort in Figure 14. This is only the presence of planning and relocation assistance, and many facilities indicated that the two are intertwined as a process. Additionally, at least ten facilities indicated that their relocation coordination operates for as long as it takes to ensure the care for the resident.

The rigor of the discharge planning process and relocation assistance offered to residents varies with average times for each listed in Figure 14. The previous statute required service or housing termination notice, summaries, and related documentation as well as coordination of housing and care transfer. For the purposes of the following analysis, facilities that listed waiting periods rather than time invested in the discharge process or move coordination were excluded. The “as long as it takes” responses were also excluded for lack of measurable data, but support was still recorded. The existing commitment by most facilities for their RN and sometimes other staff to perform discharge planning and commit substantive time to move

Figure 14: Variation in discharge planning and relocation support by capacity cohort and region

23

coordination suggests that the elements of the statute requiring such coordination and the enhanced details provided by the rules are already an operational reality for 58 percent of facilities, with the average facility spending three hours of discharge planning and an additional three hours of relocation support for the average resident. Therefore, the statute is merely codifying and standardizing, with minimal new work in preparing or executing discharge planning or move coordination required. For a facility that does not currently plan and coordinate moves, their work breakout to meet the per resident requirements would average $140 in staff time:

• Resident-relocation or service evaluation, using prepared service plan, needs and choices, and reasonably close housing and/or service providers: 20 minutes.

• Planning Conference and resulting resident-relocation plan covering rule required data elements (Minn. R. 4659.0120 Subp. 7): 2 hours.

• Discharge Summary and information for receiving provider(s) (Minn. R. 4659.0120 Subp. 8-9): 40 minutes.

The appeals process allows a challenge to the decision to terminate housing and/or services with an administrative law judge as the arbiter of fact and law. It requires that housing or services already contracted continue while the appeal is pending. Depending on when the appeal is filed, the period of appeal processing could add an additional 30 days or more to the time before termination is executed. The expedited hearing must be held within 14 calendar days, a recommendation issued within 10 business days following the hearing, and an order from the Commissioner within 14 days or the recommendation becomes the order. This results in an average assisted living cost of $6,000 and dementia care services cost of $7,500 at risk for the facility during the expected period of appeal. The process could be lengthened, if additional complexity requires delays, or expedited based on the availability of the parties to meet during the process and speed of resolution by the administrative law judge. These risks are imposed by the statute and would be recoverable from the resident or responsible party, but may impose a cash flow burden on smaller facilities if the termination is due to nonpayment and takes the statutory maximum period to fully resolve:

• 60 days nonpayment from public benefit delay (Minn. Stat. § 144G.52 Subd. 3b) • 7 days minimum pretermination notice (Minn. Stat. § 144G.52 Subd. 2c) • 30 days minimum issuance of termination notice (Minn. Stat. § 144G.52 Subd. 7b) • Appeal time limit is the termination notice period (Minn. R. 4659.0210 Subp. 1) • 14 calendar days to hear the appeal (Minn. Stat. § 144G.54 Subd. 3a) • 10 business days for issuance of a recommendation (Minn. Stat. § 144G.54 Subd. 3e) • 14 days for order from the Commissioner (Minn. R. 4659.0210 Subp. 4)

The period prior to appeal should include the move coordination for the resident (Minn. Stat. § 144G.55), but the statute requires the resident to decide and can take the full termination period, if desired. A facility could find a protracted termination period of 141 days in the worst-case scenario, amounting to an average risk of $18,471 to facilities providing assisted living services and $23,265 for facilities with dementia care. With the additional possibility that the resident prevails, and the clock starts over at pretermination notice.

24

Nonrenewal of Housing

If a facility determines renewal of housing is not desired for an individual resident, then the facility could allow the resident’s contract to end on its next scheduled renewal date. The nonrenewal of housing section of the statute requires at least 60-days’ notice and must include the reason for the nonrenewal with an equivalent requirement of move coordination and relocation assistance as with termination. The coordinated move requirement mandates continuation of the same level of service during the notice period, potentially creating an at-risk period to the balance of the contract for housing, or 60 days, whichever is longer. The costs of such a decision average a risk to $8,000 for assisted living facilities on average and $10,000 for facilities with dementia care. Those costs are for the housing and services provided, recoverable from the resident or their responsible party. Like nonrenewal of housing, if a facility offers 60-days’ notice, then reduction or elimination of one or more services is possible for an individual resident (Minn. Stat. § 144G.55, Subd. 1d). That service change does require reasons and coordination assistance for services or relocation if needed. Apart from the move coordination requirements already discussed, this imposes no new costs.

Facility Requirements

Most facilities serving assisted living residents are already in compliance with the state fire code standard of smoke alarms in sleeping quarters with approximately ten percent reporting that alarms were not present in resident rooms. The cost of complying with these standards would be allocable to the fire code itself as residential buildings and impose no new standards

on life and fire safety. This cost of compliance is minimal in time and equipment amounting to less than $100 per facility with five or fewer residents and scaling with facility size for simple battery-operated alarms installed by facility staff. Where residents occupy multiple connected

Figure 15: Fire-protection equipment in resident rooms by capacity cohort

25

private rooms, greater costs for connected alarms would apply. The number of facilities where such conditions are applicable are limited, especially in the small and micro facility cohorts where space is at a premium. Most facilities in the medium and large cohorts meet the standards for smoke alarms in resident rooms with the added requirement for larger facilities to include automated sprinklers in the facility. Those costs of compliance vary with facility but are allocable to the state fire code, as the assisted living statute applies no new standards. Additionally, assisted living facilities with secure dementia units will be required to have sprinklers installed by 2029 throughout the unit. Data regarding specific facilities with secure dementia units were not collected as a subpopulation, so isolating the costs of compliance for this piece is challenging. Given the predominance of sprinkler systems at larger facilities, where secure dementia wings are likely to be found, the current compliance gap is estimated at less than ten percent.

Planned closures

The statute requires facilities to develop closure plans well in advance of terminating services and housing for all residents. For Assisted Living Facilities with Dementia Care, closure or relinquishing of the enhanced license level would engage the requirements for planned closure or the transitional plan which is very similar. Development of the closure plan includes continuation of services at for residents until the closure is complete and associated closure compliance procedures. Additionally, notice, move coordination, and assessments of needs and preferences, as with nonrenewal of housing are continued for planned closures. Notice for orderly closure is required at least 60-days in advance and can only be issued once the plan is approved by the Commissioner. Approval can take up to two months, with receipt acknowledgement to be sent within 14 calendar days of plan and notice delivery to the Commissioner and 45 days to complete amendments, approve the plan, and verify the closure effective date. Plan submission must occur at least 120 days in advance of planned closure, requiring plan drafting and gathering records with the intent to close approximately 160 days in advance of the proposed closure date.

Of the seven elements required in the plan, the records are existing or nearly prepared from other statute mandated activities for three of them, reducing the effort required in closure planning. The following elements are excerpted from the proposed rules, which define the closure plan mandated in the statute under Minn. Stat. § 144G.57. Much of the effort in planned closure is dedicated to advancing efforts that would otherwise be executed during the notice period and gaining approval. Drafting the purpose of closure and the proposed date is a minor administrative task. Relocation timetables and facilitation is part of the discharge planning and costs are accounted for under that section, but for this purpose would be extended to the entire resident population. Identifying two safe and appropriate housing and service providers for each resident was previously accounted under coordinated moves, so adding this to the closure plan just shifts the task to the earlier planning period instead of the notice period; the requirement otherwise remains the same. The list of residents needing relocation already exists as a record of current residents and imparts no new cost. The care, payment, and representatives for each resident and a roster of residents with diminished cognitive capacity would already exist with the staffing plan and resident records, imparting no new costs to assemble into the plan. Any role and responsibility changes to staff would be part

26

of updating the staffing plan to reflect the planned closure and requires continuation of that managerial duty as defined. Administrative time is the additional effort in the closure process:

• One hour for a letter on purpose and closure (average $35 in staff time) • Four hours assembling records (average $140 in staff time), and • The rest of the time accounted for by other statutory duties.

The total cost across all responsibilities would vary significantly based on facility size. The more residents and staff a facility has, the more complex the staffing to closure and relocation operation becomes. The total expected costs of facility closure based on all the collected requirements is anywhere from $500 of staff time to almost $100,000 as depicted in Figure 16. The average facility would expect to spend approximately $7,800.

Assisted living with dementia care facilities that choose to remain open and relinquish their enhanced license level have substantially similar costs and requirements. Two key differences impact their costs of relinquishment in opposite directions. First, if any residents remain within the facility’s planned service provision under a standard assisted living license, then costs decline. With no need to transfer services or housing to another provider, every resident that remains reduces the total coordinated moves to plan and execute. Second, facilities are required to verify the safe relocation of each resident as part of the transition plan (Minn. Stat. § 144G.55, Subd. 1). What that translates to is sending a report to the commissioner in writing

Figure 16: Total costs of facility closure by capacity cohort, with averages in dollars scaled logarithmically.

27

that all identified terminations associated with the transition plan have safely relocated and the facility has completed their responsibility to coordinate and verify move completion. This requirement would take approximately 10 minutes per relocated resident to verify with listed contacts for receiving facility, resident, or representatives the completion of the safe move and issuance of the required written statement: requiring a total of 2 hours of time for an average facility of 12 residents at a staff cost of $70 or less.

Preparedness Planning

The emergency preparedness requirements of 144G are identical in practice to statutory requirements that applied to housing with services facilities under 144D. The additional component as mentioned in the rule is the incorporation of guidance from Part 4650.0100 “State Operations Manual Appendix Z – Emergency Preparedness for All Provider and Certified Supplier Types: Interpretive Guidance.” These guidelines represent the best practices in facility-based, community and all-hazard risk assessment for preparedness, response, and recovery. Within that guidance are various requirements that would potentially enhance the existing written emergency preparedness work of assisted living facilities, though it represents an increase in level of effort in drafting, maintaining, and supporting plans, relationships, and training to meet standards. In the provider survey, 671 facilities reported consistent engagement with their emergency plans, averaging seven hours for facilities in urban areas and about 6 to 6.5 hours for facilities in rural communities across the state (Figure 17).

The cited requirements for Appendix Z (42 CFR § 483.73) that apply to long-term care facilities and are incorporated with the Assisted Living Licensure rules by reference provide policy requirements on facilities. Several areas of these policies overlap with the statute

Figure 17: Cumulative time spent in reviewing plans and variation in time spent on training and drills by capacity cohort.

28

required policies described in the following section titled policy development. In the Statement of Need and Reasonableness, MDH provided an estimate of the costs allocable to the rule that were based on the federal burden calculations for long-term care facilities found in Table 56 of the final rule notice for CMS Emergency Preparedness Rules (81 Fed. Reg. 63,965). These estimates in the SONAR can be revised downward as facilities are already performing portions of the requirements or compliance is folded into other policy requirements found in 144G. One-quarter of the emergency plan requirements are already covered by existing statutory requirements under missing resident plans, infection control plans, and assessment requirements for the resident population. There is a high probability that existing strategies in place at facilities are applicable, but performance and formal application of all-hazard identification and risk assessment at the facility and community level may not be the basis of existing plans. Where that is the case, the level of effort to conduct the assessments, develop the enhanced strategies, continuity of operations, and cooperation with local authorities in incident command would take the estimated 20 hours per year of staff time, at an average of $700.

There is also likely to be additional costs borne by local emergency management agencies (1-2 hours for walkthrough, risk assessment, and resourcing/planning) and the state in surveying these plans and providing technical assistance. Local authorities may see increased calls for assistance and partnership from facilities as they begin compliance with licensure requirements. Overall, the enhanced engagement with community risk assessments and resources will decrease the costs and life safety impacts of identified risks with coordinated response strategies and developed partnerships before the hazard strikes. These requirements are further enhanced by the statute for assisted living facilities with secure dementia units. They must conduct facility and grounds hazard vulnerability assessments to mitigate risks to their population’s needs (Minn. Stat. § 144G.81).

For policy requirements and communication plans, half of the policies and two-thirds of the communication plan elements are already required whole or in-part by other areas of statute. Rather than the 16 hours basis of total annual burden used in the SONAR, the allocable requirements under Appendix Z are likely closer to seven hours across the new policies and communication plan consolidation and review annually. This amounts to a recommended cost reduction to the SONAR estimates of $765 due to duplication of effort with statute mandated items in assessment, staffing, and existing work in emergency preparedness under prior law.

Staff training requirements under the Appendix Z standard was listed as a combined 15 hours of effort. While the plan testing required is not likely to the federal standard, facilities are expending time training and conducting drills of their plan annually. Average time spent on all aspects of planning and the dedicated effort per fulltime equivalent is plotted out in figure 17. The training and drills cost assessment in the SONAR could be revised downward to account for existing training efforts occurring at facilities in preparedness. As a result, the average facility will only see an increase of 9 hours of effort if their existing training has complete overlap with updated requirements. This results in a recommended reduction in the SONAR estimate of $510. The total complete preparedness cost recommendation based on this analysis would be $1,275 for a total anticipated cost for the average facility of $3,108 in staff time depending on alignment of current plans with new standards.

29

The following three sections analyze in more detail the costs associated component plans. Each section details the current reported costs associated with each plan. For the purposes of cost calculations, salary averages for registered nurses in Minnesota were assumed, with urban facilities in the metro at $40.58 hourly and others at $34.50 hourly. This is different from the cost assessment in the SONAR and federal review of preparedness which used a higher national burden calculation standard of $85 per hour for nurse supervisors and administrators and $91 hourly for facility directors. Because those rates were used for the assumed population of long-term care facilities, the following analysis shifted to reflect the pay rates specific to Minnesota and more reflective of the median facility size at 13.5 residents. Larger facilities will likely approach the national standards and their costs would be more accurately represented with higher salaries and is worth considering when reviewing the analysis.

Training and Drills

Appendix Z has requirements for plan testing that would increase the expense of training and drills in accordance with estimates in the SONAR. Additional increases in training were listed in the statute with requirements for drill twice per year per shift, amounting to at least one drill every other month (Minn. Stat. § 144G.45). These six drill minimums are an increase under prior standards of two per year (Minn. Stat. § 144D.11). These two requirements would triple the training and drill time current spent by facilities, increasing the cost at an average facility by 12 hours across the average staff of 13.5 fulltime equivalents. The average impact of this increase in drills is $2,430 hours in staff time and significantly more for coordination and management if residents or community emergency response are involved in the training.

Missing Resident Review

The statute requires that facilities to have missing resident policies and procedures and the rule enhances the detail of these requirements specifying what should be contained within the statute mandated plan. Emergency contact, delegation of duties, and notification requirements all components of this plan, which leans heavily on the assessments to identify the risk level of a resident to wander or elope or take sufficient self-preservation actions. As assessments identify resident risk and staffing plans account for personnel to implement plans and reserve staff to search, the missing resident policy is a procedural map that speeds the process of locating a resident while maintaining service levels for residents not missing. The rules do impose a requirement to review the plan at least quarterly and document changes (Minn. R. 4659.0110). This review would be best practice alignment with any changes found in ongoing assessments, along with staffing changes that may have occurred since the prior plan review and is estimated to take between 4 and 12 hours of senior staff time. If performed with the staffing plan reviews following periodic review of assessments, the plan should take less time as the task alignments increase efficiency. The increased cost for the average facility would then by $140 to $420 in staff time.

Disease Prevention and Infection Control Review

Congregate care generally has faced significant challenges with COVID-19. As a result, greater attention has been paid to infection control practices, policies, and training at facilities of all sizes. Recognizing the changed nature of infection control and its importance, particularly

30

in congregate care settings the new statute provides guidance on standards for infection control. These requirements impose no new costs with a COVID-19 infection control baseline.

Discussion

Total costs for the average assisted living facility (10.2 FTE for 23 residents) are anticipated to be $9,453 with costs at the average assisted living facility with dementia care (24.5 FTE for 53 residents) anticipated to be $20,260. Those costs are both the statute and rule requirements, with the rule accounting for approximately $4,000 of that cost. Costs are divided into major categories with impacted facilities identified:

• Licensing costs are likely lower by less than $1,000 for facilities with fewer than 50 residents and facilities that form a campus.

• Policy updates and requirements, including Disaster Preparedness, Missing Resident Plan, and Infection Control are the costliest for the average facility requiring between $1,100 and $6,000 of senior staff time depending on the rigor of existing policies and plans already required.

• Kitchen regulation costs either go down by subsuming the food and beverage compliance into the licensure or increase by regulating a previously unlicensed kitchen. Providers with fewer than 5 residents are most likely to bear the cost burden, at least $300 in compliance work and training under the food code.

• Meal requirements may add $25,000 in salary costs for the 11 percent of facilities that did not report providing three meals daily. Additional value is at risk by requiring trained preparation and service of meals when minimum meal purchase cannot be mandated in resident contracts.

• Staffing plans seem daunting, but when built atop ongoing standard assessments and the documented staff competencies required, the time should take managing staff 15 minutes for each staff member and an hour for every set of four residents averaging by capacity cohort:

o Micro facility with 7 FTE and 4 residents takes about 3 hours. o Small facility with 10 FTE and 9 residents takes about 5 hours. o Medium facility with 15 FTE and 29 residents takes about 11 hours. o Large facility with 31 FTE and 106 residents takes about 35 hours.

• Training costs will increase for all assisted living facilities by increasing their direct care staff orientation requirements by four hours of dementia training, averaging $631 per facility per year. Training costs increase for directors of dementia care facilities by increasing their annual dementia care component by two hours, averaging $70 to $180 per year.

• Assessment costs for most facilities will be zero if their existing software meets the standards. For the 40 percent without a tool, adopting the hardcopy criteria would cost less than $200, with printing costs adding $10 per assessment. Alternatively, facilities could adopt software in use elsewhere at a combined expected cost of software and training averaging $12,000 per year.

• All other costs and values at risk are circumstantial tied to terminations, relocations, and facility fire protection equipment that are difficult to generalize.

31

Data Notes

Prior to delivering the online survey for this analysis, a sampling plan was developed to determine the minimum necessary survey response required to meet sufficient statistical efficacy and representativeness. The assessment utilized the available data on housing with services registrants providing assisted living under current law and a set of standard statistical assumptions. Specifically, the minimum sample size calculation utilized the total number of assisted living facilities in Minnesota (1,692), a 95 percent confidence interval, an assumed margin of error of 5 percent, and a probability proportion of 0.50 to maximize the result of the function. From these inputs, the initial survey response target required to meet these statistical assumptions was 385 total responses. The actual number of valid survey responses collected far exceeded this goal, totaling to 696 usable responses.

As an example of the statistical fidelity of the data, from the 696 responses, we were able to determine with 95 percent confidence that the average number of Registered Nurses at any assisted care living facility is at least one nurse. We were also able to determine, with the same level of confidence, that each capacity cohort has a minimum of 5 direct care employees on average with the largest of the cohort (50+, Large) having an average of approximately 21 direct care employees.

As with any survey study, error is inherent in the survey responses, requiring close inspection of the data during the validation process and continuing via logic checks throughout the analysis. For example, during the data validation process, it was clear that a portion of the error in the survey question responses for staffing numbers was due to responders answering the questions in total facility headcount numbers as opposed to the intended FTE units. Overall, following the identification and treatment of incomplete responses and a particularly small set of extreme outliers, the survey responses were found to be within expected and acceptable range. In general, the survey response data aligned with previously collected data, which in the case of staffing held a similar gradient between capacity cohorts. In summation, the collective effect of survey response error present in the analysis is within acceptable statistical tolerance and not such that it negatively impacts the cost analysis.

Key References

Minnesota Statutes 2020, Chapters 144A, 144D, 144G, 504B, and § 325F.72.

Minnesota Laws 2020, 7th Special Session Chapter 1, Article 6.

Minnesota Rules Chapter 4659.

Medicare and Medicaid Programs; Emergency Preparedness Requirements for Medicare and Medicaid Participating Providers and Suppliers Final Rule, 81 FR 63860, Sept. 16, 2016.

Requirements for Long Term Care Facilities; Emergency Preparedness, 42 CFR §483.73.

State Operations Manual: Appendix Z- Emergency Preparedness for All Provider and Certified Supplier Types Interpretive Guidance. Issued Feb. 1, 2019. Centers for Medicare & Medicaid Services (CMS): HHS-0938-2019-F-6260.

Cost Baseline and Impact AnalysisAbstractAcknowledgements

Executive SummaryMethods and Assessment OverviewLocations of Facilities SurveyedFacility Capacity Cohort SummaryRurality

Facility Licensing and ComplianceLicensing CostCampus LicensingFacility Management

Minimum Facility RequirementsDoor LocksKitchensAdditional Services

StaffingTrainingAssessmentTerminationNonrenewal of Housing

Facility RequirementsPlanned closures

Preparedness PlanningTraining and DrillsMissing Resident ReviewDisease Prevention and Infection Control Review

DiscussionData Notes

Key References