[As Amended by House Committee of the
Whole]
As Amended by House Committee
Session of 2000
HOUSE BILL No. 3042
By Committee on Appropriations
3-16
11 AN ACT
relating to the medicaid state plan; establishing an
inter-
12 governmental transfer
program; concerning nursing facilities owned
13 and operated by units
of government; relating to the federal medical
14 assistance (medicaid)
program; establishing an intergovernmental
15 transfer fund, an
intergovernmental transfer administration fund, a
16 long-term care loan
and grant fund, a senior services trust fund
and,
17 a senior services
fund, an HCBS programs fund, a medicaid serv-
18 ices matching fund
and a special education services aid fund
19 within the state
treasury; authorizing certain participation agreements,
20 loans, grants and
contracts; amending K.S.A. 75-5321a and repealing
21 the existing
section.
22
23 Be it enacted by the Legislature of the
State of Kansas:
24 Section
1. K.S.A. 75-5321a is hereby amended to read as follows:
75-
25 5321a. The secretary of social and
rehabilitation services shall take nec-
26 essary actions to transfer the
administration of certain long-term care
27 programs and services to the secretary of
aging. The programs shall in-
28 clude the nursing facility services payment
program, the home and com-
29 munity based nursing
facility services for the frail elderly waiver
program,
30 the case management for the frail
elderly program and the income eligible
31 (home care) program. Excluding nursing
facility programs, the programs
32 to be transferred shall not include
long-term care programs for individuals
33 under the age of 65 with mental illness,
mental retardation, other mental
34 disabilities or physical disabilities. All
such transfers shall be made only
35 in accordance with federal grant
requirements related to such programs.
36 New Sec.
2. (a) The secretary of social and rehabilitation services
and
37 the secretary of aging shall take necessary
actions to establish an inter-
38 governmental transfer program as a part of
the nursing facility services
39 payment program within the medicaid state
plan.
40 (b) In
implementing the intergovernmental transfer program, the
41 secretary of aging shall disburse moneys
received from the federal gov-
42 ernment for the intergovernmental transfer
program and moneys trans-
2
1 ferred from the state general fund to
the intergovernmental transfer fund
2 for the program to units of
government which have entered into partic-
3 ipation agreements with the secretary
of aging and the secretary of social
4 and rehabilitation services. The
amount of moneys disbursed to the units
5 of government from moneys transferred
from the state general fund to
6 the intergovernmental transfer fund
for the program shall not exceed the
7 amount necessary to match federal
funds available to the state under the
8 intergovernmental transfer program.
The secretary of aging shall peri-
9 odically calculate the amount of
federal funds available under the pro-
10 gram according to the methodology
prescribed for the intergovernmental
11 transfer program in the medicaid state
plan.
12 (c) The secretary
of social and rehabilitation services and the secre-
13 tary of aging are authorized to enter into
intergovernmental transfer pro-
14 gram participation agreements with units of
government which own and
15 operate nursing facilities. The
participation agreements may permit the
16 units of government to retain a
participation fee specified by the secretary
17 of aging from moneys received under the
intergovernmental transfer pro-
18 gram which are otherwise required to be
transferred back to the secretary
19 of aging.
20 (d)
(1) There is hereby established the intergovernmental
transfer
21 fund in the state treasury which shall be
administered by the secretary of
22 aging in accordance with this act. All
expenditures from the intergovern-
23 mental transfer fund shall be to disburse
the state match amount under
24 the intergovernmental transfer program and
shall be made in accordance
25 with appropriation acts upon warrants of
the director of accounts and
26 reports issued pursuant to vouchers
approved by the secretary of aging
27 or the secretary's designee. Subject to the
provisions of appropriation acts,
28 when the secretary of aging determines that
an amount of federal med-
29 icaid moneys is available for the
intergovernmental transfer program, the
30 secretary of aging shall determine the
amount required as the state match
31 and shall certify that amount to the
director of accounts and reports. Upon
32 receipt of each such state match
certification, the director of accounts
33 and reports shall transfer the amount
certified by revenue transfer from
34 the state general fund to the
intergovernmental transfer fund. Upon the
35 crediting of such state match amount in the
intergovernmental transfer
36 fund, the secretary of aging shall disburse
the amount of federal moneys
37 and the state match amount to the units of
government that have entered
38 into participation agreements under the
program.
39 (2) Each unit of
government receiving a disbursement under the in-
40 tergovernmental transfer program shall
reimburse the amount of money
41 received, less the amount of the
participation fee, to the secretary of
42 aging. Upon receipt of each amount of
moneys from participating units
43 of government under the intergovernmental
transfer program, the sec-
3
1 retary of aging shall deposit the
entire amount in the state treasury to the
2 credit of the intergovernmental
transfer fund. The secretary of aging shall
3 determine the amount of each such
deposit that was transferred from the
4 state general fund to match medicaid
federal funds under the intergov-
5 ernmental transfer program and shall
certify such amount to the director
6 of accounts and reports. Upon receipt
of each such certification, the di-
7 rector of accounts and reports shall
retransfer the amount certified from
8 the intergovernmental transfer fund
to the state general fund.
9 (e) There
is hereby established the intergovernmental transfer ad-
10 ministration fund in the state treasury
which shall be administered by the
11 secretary of aging in accordance with this
act. All expenditures from the
12 intergovernmental transfer administration
fund shall be to pay the costs
13 of administering the intergovernmental
transfer program and shall be
14 made in accordance with appropriation acts
upon warrants of the director
15 of accounts and reports issued pursuant to
vouchers approved by the
16 secretary of aging or the secretary's
designee. The secretary of aging shall
17 recover the costs of administering the
intergovernmental transfer pro-
18 gram from the intergovernmental transfer
fund by certifying the amount
19 of such costs to the director of accounts
and reports each calendar quar-
20 ter. Upon receipt of each certification of
costs from the secretary of aging
21 under this subsection, the director of
accounts and reports shall transfer
22 the amount certified from the
intergovernmental transfer fund to the
23 intergovernmental transfer administration
fund.
24 (f) After each
amount of moneys is credited to the intergovernmental
25 transfer fund and the amount of the state
match that had been transferred
26 from the state general fund has been
transferred back to the state general
27 fund pursuant to subsection (d)(2), and
after the transfer of the amount
28 certified by the secretary of aging to the
intergovernmental transfer ad-
29 ministration fund pursuant to subsection
(e), if any, the director of ac-
30 counts and reports shall transfer the
remaining amount in the intergov-
31 ernmental transfer fund as follows:
32 (1) During the
period from the effective date of this act through June
33 30, 2001, 60% of such amount shall be
transferred to the senior services
34 trust fund established by section 3 and
amendments thereto, 25% of such
35 amount shall be transferred to the state
general fund and 15%, except
36 as otherwise provided in subsection (q),
10% of such amount shall
37 be transferred to the long-term care loan
and grant fund established by
38 subsection (h), and 5% of such amount
shall be transferred to the
39 HCBS programs fund established by
subsection (o); and
40 (2) after June
30, 2001, 70% of such amount shall be transferred to
41 the senior services trust fund and
30%, 25% of such amount shall be
42 transferred to the state general
fund medicaid services matching fund
43 established by subsection (p), and 5% of
such amount shall be
4
1 transferred to the long-term loan
and grant fund.
2 (g) There
is hereby established the senior services fund in the state
3 treasury which shall be administered
by the secretary of aging in accord-
4 ance with this act. All expenditures
from the senior services fund shall be
5 made in accordance with appropriation
acts upon warrants of the director
6 of accounts and reports issued
pursuant to vouchers approved by the
7 secretary of aging or the secretary's
designee. Moneys in the senior serv-
8 ices fund shall be used by the
secretary of aging only for projects intended
9 (1) to reduce future medicaid costs
to the state, (2) to help seniors avoid
10 premature institutionalization, (3) to
improve the quality of care or the
11 quality of life of seniors who are
customers of long-term care programs,
12 or (4) to satisfy state
matching requirements for senior service programs
13 authorized by federal law[, or (5) to
provide financial assistance un-
14 der the senior pharmacy assistance
program, which shall be first
15 priority for the use of moneys in the
senior services fund]. Moneys
16 credited to the senior services fund from
income of investments of the
17 moneys in the senior services trust fund
shall not be used to create or
18 fund any entitlement program not in
existence on the effective date of
19 this act.
20 (h) There is
hereby established the long-term care loan and grant
21 fund in the state treasury which shall be
administered by the secretary of
22 aging in accordance with this act. All
expenditures from the long-term
23 care loan and grant fund shall be
made in accordance with appropriation
24 acts upon warrants of the director of
accounts and reports issued pursuant
25 to vouchers approved by the secretary of
aging or the secretary's designee.
26 Moneys in the long-term care loan and
grant fund shall be used to make
27 loans and grants under the long-term
care loan and grant program
28 developed by the secretary of aging in
accordance with this section.
29 (i) The secretary
of aging is hereby authorized to develop and imple-
30 ment a long-term care loan and grant
program in accordance with this
31 section. Subject to the provisions of this
section and the provisions of
32 appropriation acts, the secretary of aging
may enter into loan agreements
33 for market-rate, low-interest or
no-interest, fully or partially secured or
34 unsecured loans with repayment provisions
and other terms and condi-
35 tions as may be prescribed by the secretary
under such program. Loans
36 under the long-term care loan and
grant program may be made for the
37 following:
38 (1) Converting
all or parts of some types of licensed adult care homes
39 from their existing licensure types to
different licensure types to meet
40 demonstrated changing service demands in
their communities;
41 (2) converting
private residences to licensed homes plus facilities, as
42 defined by K.S.A. 39-923 and amendments
thereto;
43 (3) converting
space in rural hospitals to hospital-based long-term
5
1 care facilities;
2
(4) improving some types of the quality of
care provided by li-
3 censed adult care homes;
4 (5) rural
hospitals contracting for physician, physician assistant or li-
5 censed professional nurse services;
or
6
(6) building congregate housing for seniors in Kansas cities
with pop-
7 ulations of 2,500 or less.
8 (j) The
secretary of aging may consider the following factors to pri-
9 oritize and select loans and
grants under the long-term care loan pro-
10 gram and grant
programs and projects financed from the senior services
11 fund:
12 (1) Type of loan
-- higher interest is preferable to lower interest and
13 more secured is preferable to less
secured;
14
(2) location -- rural is preferable to urban or
suburban;
15 (2) size of facility --
facilities having less than 60 beds are pref-
16 erable to facilities having 60 beds or
more;
17 (3) an
applicant for a loan that has applied for and has been
18 rejected by a Kansas commercial lending
institution for a loan at
19 prevailing commercial rates for the same
purpose is preferable to
20 an applicant for a loan that has not
applied for and has not been
21 rejected by a Kansas commercial lending
institution for a loan at
22 prevailing commercial rates for the same
purpose;
23 (4)
availability and utilization of the same type of facilities or
services
24 in the proposed loan or project area;
25 (4)
(5) type of facility owner or borrower -- unit of
government,
26 Kansas
not-for-profit, Kansas for-profit, foreign not-for-profit,
foreign or-
27 ganizations, for-profit
organizations, and individuals, in that order of
28 preference; and
29 (5)
(6) type of research project organization -- geriatric
schools or
30 programs in Kansas colleges or
universities, Kansas colleges or universi-
31 ties, educational foundations, foreign
colleges or universities, Kansas not-
32 for-profit organizations, Kansas for-profit
organizations, foreign not-for-
33 profit organizations, foreign for-profit
organizations, and individuals, in
34 that order of preference.
35 (k) All moneys
received from repayments of principal and interest of
36 any loan made under this act shall be
deposited in the state treasury and
37 credited to the long-term care loan fund
within the state treasury and
38 used to make new loans. The repayment of a
loan or of a senior services
39 fund project contract or grant may not be
forgiven, in whole or in part,
40 except by an act of the
legislature as authorized by law.
41 (l) The secretary of aging is
hereby authorized to develop and
42 implement a long-term care grant program
in accordance with this
43 section. Subject to the provisions of
this section and the provisions
6
1 of appropriation acts, the
secretary of aging may make competitive
2 matching grants under such terms
and conditions as may be pre-
3 scribed by the secretary under
such program. Grants under the
4 long-term care grant program may
be made only from the amount
5 of moneys received for interest
payments under loan agreements
6 under the long-term care loan
program and credited to the long-
7 term care loan and grant fund.
Grants under the long-term care
8 grant program may be made for the
following:
9
(1) Grants for improvements in the quality of case
manage-
10 ment services under home and
community-based services (HCBS)
11 programs and for improvements for adult
care homes; and
12 (2) financial
assurance grants for community service providers
13 under home and community-based services
(HCBS) programs.
14 (l)
(m) For purposes of this section, ``units of
government'' and ``units
15 of government which own and operate nursing
facilities'' which are eli-
16 gible to enter into intergovernmental
transfer program participation
17 agreements shall be limited to cities of
the first class, cities of the second
18 class, counties, hospital districts, or
health care facilities and services hos-
19 pital districts which hold legal title to
and are actively involved in the day-
20 to-day operations of any of the
following:
21
(1) Medicaid-certified nursing facilities and nursing
facilities for men-
22 tal health, as defined in K.S.A. 39-923 and
amendments thereto;
23
(2) medicaid-certified long-term care facilities which are
operated in
24 connection with city hospitals established
under K.S.A. 13-14b01 et seq.
25 and amendments thereto or K.S.A. 14-601
et seq. and amendments
26 thereto, county hospitals established under
K.S.A. 19-4601 et seq. and
27 amendments thereto, or district hospitals
established under K.S.A. 80-
28 2501 et seq. and amendments thereto;
or
29
(3) medicaid-certified long-term care facilities operated
under au-
30 thority of K.S.A. 80-2550 et seq.
and amendments thereto.
31 (m)
(n) Entities eligible to apply for loans under the
long-term care
32 loan program under this section shall be
limited to the owners of:
33 (1) Licensed
adult care homes, excluding nursing facilities for mental
34 health and intermediate care facilities for
the mentally retarded, as de-
35 fined in K.S.A. 39-923 and amendments
thereto;
36
(2) medicaid-certified licensed hospitals and
medicaid-certified long-
37 term care facilities based in or operated
in connection with licensed hos-
38 pitals as defined in K.S.A. 65-425 and
amendments thereto;
39 (3) private
residences which the owners will contract to convert into
40 licensed homes plus facilities, as defined
in K.S.A. 39-923 and amend-
41 ments thereto, and in which the owners will
reside after the conversion
42 and licensure; or
43 (4) congregate
senior housing projects being built with loans in Kan-
7
1 sas cities with a population of 2,500
or less.
2 (o) There is hereby
established the HCBS programs fund in
3 the state treasury which shall be
administered by the secretary of
4 aging. All moneys in the HCBS
programs fund shall be used to
5 reduce the waiting list for
programs and services under the home
6 and community-based services
(HCBS) programs and as otherwise
7 provided by law. All expenditures
from the HCBS programs fund
8 shall be made in accordance with
appropriation acts upon warrants
9 of the director of accounts and
reports issued pursuant to vouchers
10 approved by the secretary of aging or
the secretary's designee.
11 (p) There is
hereby established the medicaid services matching
12 fund in the state treasury which shall
be administered by the sec-
13 retary of aging. All moneys in the
medicaid services matching fund
14 shall be used to provide state matching
funds for medicaid pro-
15 grams and services under the medicaid
state plan. All expenditures
16 from the medicaid services matching fund
shall be made in ac-
17 cordance with appropriation acts upon
warrants of the director of
18 accounts and reports issued pursuant to
vouchers approved by the
19 secretary of aging or the secretary's
designee.
20 (q) There is
hereby established the special education services
21 aid fund in the state treasury which
shall be administered by the
22 department of education. All moneys in
the special education serv-
23 ices aid fund shall be used for aid to
school districts in accordance
24 with the special education for
exceptional children act and the pro-
25 visions of appropriation acts. All
expenditures from the senior serv-
26 ices fund shall be made in accordance
with appropriation acts
27 upon warrants of the director of
accounts and reports issued pur-
28 suant to vouchers approved as provided
by law. During the period
29 from the effective date of this act
through June 30, 2001, of the
30 amount of moneys that would otherwise be
transferred to the state
31 general fund pursuant to subsection
(f)(1), the first $14,600,000
32 shall be transferred to the special
education services aid fund in-
33 stead of the state general fund.
34 New Sec.
3. (a) The board of trustees is responsible for the
manage-
35 ment and investment of the senior services
trust fund which is hereby
36 established in the state treasury. The
board of trustees shall discharge the
37 board's duties relative to the fund for the
exclusive purpose of providing
38 investment revenue for the purposes for
which the fund moneys may be
39 used and defraying reasonable expenses of
administering the fund. The
40 board shall invest and reinvest moneys in
the fund and acquire, retain,
41 manage, including the exercise of any
voting rights, and dispose of in-
42 vestments of the fund within the
limitations and according to the powers,
43 duties and purposes as prescribed by this
section.
8
1 (b) Moneys
in the fund shall be invested and reinvested to achieve
2 the investment objective which is
preservation of the fund to provide
3 income and accordingly providing that
the moneys are as productive as
4 possible, subject to the standards
set forth in this act. No moneys in the
5 fund shall be invested or reinvested
if the sole or primary investment
6 objective is for economic development
or social purposes or objectives.
7 (c) In
investing and reinvesting moneys in the fund and in acquiring,
8 retaining, managing and disposing of
investments of the fund, the board
9 of trustees shall exercise the
judgment, care, skill, prudence and diligence
10 under the circumstances then prevailing,
which persons of prudence, dis-
11 cretion and intelligence acting in a like
capacity and familiar with such
12 matters would use in the conduct of an
enterprise of like character and
13 with like aims by diversifying the
investments of the fund so as to mini-
14 mize the risk of large losses, unless under
the circumstances it is clearly
15 prudent not to do so, and not in regard to
speculation but in regard to
16 the permanent disposition of similar funds,
considering the probable in-
17 come as well as the probable safety of
their capital.
18 (d) In the
discharge of such management and investment responsi-
19 bilities the board of trustees may contract
for services of one or more
20 professional investment advisors or other
consultants in the management
21 and investment of moneys in the fund and
otherwise in the performance
22 of the duties of the board of trustees
under this act.
23 (e) The board of
trustees shall require that each person contracted
24 with under subsection (d) to provide
services shall obtain commercial
25 insurance which provides for errors and
omissions coverage for such per-
26 son in an amount to be specified by the
board of trustees. The amount
27 of such coverage specified by the board of
trustees shall be at least the
28 greater of $500,000 or 1% of the funds
entrusted to such person up to a
29 maximum of $10,000,000. The board of
trustees shall require a person
30 contracted with under subsection (d) to
provide services give a fidelity
31 bond in a penal sum as may be fixed by law
or, if not so fixed, as may be
32 fixed by the board of trustees, with
corporate surety authorized to do
33 business in this state. Such persons
contracted with the board of trustees
34 pursuant to subsection (d) and any persons
contracted with such persons
35 to perform the functions specified in
subsection (b) shall be deemed to
36 be fiduciary agents of the board of
trustees in the performance of con-
37 tractual obligations.
38 (f)
(1) Subject to the objective set forth in subsection (b) and
the
39 standards set forth in subsection (c), the
board of trustees shall formulate
40 and adopt policies and objectives for the
investment and reinvestment of
41 moneys in the fund and the acquisition,
retention, management and dis-
42 position of investments of the fund. Such
policies and objectives shall be
43 in writing and shall include:
9
1
(A) Specific asset allocation standards and objectives;
2
(B) establishment of criteria for evaluating the risk versus
the poten-
3 tial return on a particular
investment; and
4 (C) a
requirement that all investment advisors, and any managers or
5 others with similar duties and
responsibilities as investment advisors, shall
6 immediately report all instances of
default on investments to the board
7 of trustees and provide such board of
trustees with recommendations and
8 options, including, but not limited
to, curing the default or withdrawal
9 from the investment.
10 (2) The board of
trustees shall review such policies and objectives,
11 make changes considered necessary or
desirable and readopt such policies
12 and objectives on an annual basis.
13 (g)
(1) Except as provided in subsection (d) and this subsection,
the
14 custody of money and securities of the fund
shall remain in the custody
15 of the state treasurer, except that the
board of trustees may arrange for
16 the custody of such money and securities as
it considers advisable with
17 one or more member banks or trust companies
of the federal reserve
18 system or with one or more banks in the
state of Kansas, or both, to be
19 held in safekeeping by the banks or trust
companies for the collection of
20 the principal and interest or other income
or of the proceeds of sale.
21 (2) The state
treasurer and the board of trustees shall collect the
22 principal and interest or other income of
investments or the proceeds of
23 sale of securities of the fund in the
custody of the state treasurer and shall
24 pay such moneys when so collected into the
state treasury to the credit
25 of the fund.
26 (3) The principal
and interest or other income or the proceeds of sale
27 of securities of the fund as provided in
paragraph (1) of this subsection
28 shall be reported to the state treasurer,
the director of accounts and re-
29 ports and the board of trustees and
credited to the fund.
30 (h) All interest
or other income of the investments of the moneys in
31 the fund, after payment of any management
fees, shall be considered
32 income of the fund and shall be withdrawn
and deposited quarterly in
33 the state treasury to the credit of the
senior services fund to be used by
34 the secretary of aging for the purposes
permitted by section 2 and amend-
35 ments thereto.
36 (i) As used in
this section:
37 (1) ``Board of
trustees'' means the board of trustees of the Kansas
38 public employees retirement system
established by K.S.A. 74-4905 and
39 amendments thereto.
40 (2) ``Fiduciary''
means a person who, with respect to the fund, is a
41 person who:
42 (A) Exercises any
discretionary authority with respect to administra-
43 tion of the fund;
10
1
(B) exercises any authority to invest or manage assets of the
fund or
2 has any authority or responsibility
to do so;
3
(C) provides investment advice for a fee or other direct or
indirect
4 compensation with respect to the
assets of the fund or has any authority
5 or responsibility to do so;
6
(D) provides actuarial, accounting, auditing, consulting,
legal or other
7 professional services for a fee or
other direct or indirect compensation
8 with respect to the fund or has any
authority or responsibility to do so;
9 or
10 (E) is a member
of the board of trustees or of the staff of the board
11 of trustees.
12 (3) ``Fund''
means the senior services trust fund.
13 (4) With respect
to the investment of moneys in the senior services
14 trust fund, ``purposes for which the moneys
may be used'' means the
15 purposes for which the moneys in the senior
services fund may be used,
16 as provided in section 2 and amendments
thereto.
17 New Sec.
4. The board of trustees of the Kansas public employees
18 retirement system shall report to the
governor and to the legislature on
19 the moneys credited to the senior services
trust fund and investment
20 earnings thereon at least once each
calendar quarter and on a monthly
21 basis upon request of the governor, the
president of the senate or the
22 speaker of the house of representatives.
The director of the budget and
23 the governor shall use the information in
such reports in the preparation
24 of the governor's budget report under
K.S.A. 75-3721 and amendments
25 thereto.
26 Sec. 5. K.S.A. 75-5321a is
hereby repealed.
27 Sec. 6. This act shall
take effect and be in force from and after its
28 publication in the Kansas register.