HF4562

1. Purpose
2. To modify how Minnesota grants new initial licenses for child foster care and related settings, by tightening a licensing moratorium and adding specific exceptions.
3. To improve how capacity is planned and managed for foster care and community residential settings, using data and input from stakeholders, local counties, and residents’ needs.

4. To make targeted updates to several child welfare and adult care provisions, and to correct or align terminology and processes with statewide planning and federal program requirements (notably the Family First Prevention Services Act).

5. Main Provisions at a Glance

6. Licensing moratorium: The state would generally not issue initial licenses for child foster care settings (under specific Minnesota Rules) or for community residential settings (under chapter 245D) unless certain conditions are met, including compliance with the Family First Prevention Services Act (FFPSA).

7. FFPSA requirement: An initial license for child foster care settings must include FFPSA-related certifications for the setting to operate as a licensed placement that meets federal prevention standards.

8. Exceptions to the moratorium: The bill lists several specific situations when new licenses may be issued despite the moratorium, including: 1) Licenses for locations that are not the primary residence of the license holder, with at least 80% of residents aged 55 or older. 2) New licenses that replace existing licenses from certain years (2009 or 2013) as determined needed by the commissioner. 3) New licenses needed for the closure or restructuring of state-operated facilities (e.g., nursing facilities, ICF/DDs, regional treatment centers) or to move people to community settings. 4) New licenses for hospital-level care needs. 5) New licenses needed due to the closure of certain small homes (5–6 bed supervised living facilities not designated as ICFs), to be used in transition.

9. Need determination: The commissioner must determine the need for newly licensed foster care homes or community residential settings, considering:

   • Availability of capacity in the area
   • Recommendations from the local county board
   • Individual choices in annual assessments and service plans
   • Data and other information required by state data goals
   • The determination is final and not subject to appeal

10. Capacity management and delicense: The commissioner can adjust statewide licensed capacity, approve new settings, or delicense existing ones to manage capacity and meet needs.

11. Primary residence disclosure: Applicants and license holders must disclose whether the location where foster care will be provided is the license holder’s primary residence for the entire licensure period; changes must be reported, and the license certificate must indicate whether the location is the primary residence.

12. Waiver-funded services disclosure: Licensees providing waiver-funded services (under 256S or 256B waivers) and operating in a setting not the primary residence must inform the licensing division about those waiver-funded services.

13. notice and reconsideration: If beds are reduced, the license holder must be notified in writing with the right to request reconsideration within 20 days by mail or personal service.

14. Special treatment for children’s residential treatment: No initial license would be issued for programs that CMS would classify as institutions for mental diseases (IMD) unless exempted (private pay clients are exempt). The agency can manage capacity for these services and may issue licenses if doing so would not increase statewide capacity subject to the moratorium.

15. Related statutory updates: The bill would amend and add provisions to multiple statutes and subparts, including sections for licensing, capacity, and process changes, and would repeal certain existing subsections.

16. What this Bill Seeks to Accomplish

17. Align foster care licensing with federal standards (FFPSA) and ensure placements meet prevention and safety criteria.

18. Control growth in licensed foster care and community residential capacity to match demonstrated need and available resources.

19. Encourage data-driven planning and stakeholder input to determine where new licenses are truly needed.

20. Improve transparency for license holders about residency status and any changes to capacity or waivers.

21. Create a formal process for reducing capacity (delicensing) when appropriate and providing a path for reconsideration.

22. Significant Changes to Existing Law

23. Introduction of a formal licensing moratorium for new child foster care and certain community residential settings, with defined exceptions.

24. New requirements to assess and publish need determinations before issuing new licenses.

25. Mechanisms to adjust or reduce licensed capacity (delicense) and to notify licensees with an established reconsideration process.

26. Requirements around primary residence status of license holders and disclosure of waiver-funded services in shared settings.

27. Specific handling of children’s residential treatment services to avoid expanding capacity in settings CMS would classify as IMDs, with private-pay exemptions.

28. A broader data-driven and stakeholder-involved approach to determine where capacity increases or decreases are appropriate, including potential changes to where residents can move to better meet needs.

29. Process and Oversight Implications

30. The commissioner of Human Services leads the determinations, considering area capacity, local county recommendations, and individual resident service plan data.

31. The final need determinations are binding and not subject to appeal under the moratorium framework.

32. The state is empowered to adjust capacity, delicense settings, or approve new licensed settings as part of capacity management.

33. Counties play a role in reporting resident movements and informing DHS Licensing Division when adults move out of certain foster care settings.

34. Impacts on Stakeholders

35. Foster care license holders and operators: More reporting on residency status, potential bed reductions, and the possibility of delicense; needs to pursue FFPSA compliance for new licenses.

36. Local counties: Involved in recommending license approvals and communicating resident movement data.

37. Residents and families: May experience changes in where placements can occur and how capacity is allocated; increased emphasis on data-informed placement decisions.

38. Providers of waiver-funded services: Must inform licensing divisions about waiver services if not the license holder’s primary residence.

Relevant Terms - licensing moratorium - child foster care - Family First Prevention Services Act (FFPSA) - FFPSA certification - primary residence - foster care license - community residential setting - adult foster care - resource need determination - 144A.351 data (state data requirements) - capacity and delicensing (delicense) - nursing facility closures - ICF/DD (institution for mental diseases context; CMS terminology) - hospital-level care - 256S waivers - 256B.092 / 256B.49 (waivers and service provisions) - 245D (chapter governing certain residential settings) - children’s residential treatment services - Centers for Medicare and Medicaid Services (CMS) - IMD (institution for mental diseases) context