Licensed Beds On Lay-Away Status

June, 2000

Information Bulletin 00-13

Licensed Beds On Lay-Away Status

The 2000 State Legislature enacted new legislation which allows nursing facilities to lay-away up to 50 percent of their licensed and certified beds for up to five years. The provisions for the lay-away of licensed and certified beds is found in 144A.071, Subd. 4b and reads as follows:

Minnesota Statutes 144A.071, subdivision 4b.

A licensed and certified nursing facility may lay-away, upon prior written notice to the commissioner of health, up to 50 percent of its licensed and certified beds. A nursing facility may not discharge a resident in order to lay away a bed. Notice to the commissioner shall be given 60 days prior to the effective date of the lay-away. Beds on lay-away shall have the same status as voluntarily delicensed and decertified beds and shall not be subject to license fees and license surcharge fees. In addition, beds on lay-away may be removed from lay-away at any time on or after one year after the effective date of lay-away in the facility of origin, with a 60-day notice to the commissioner. A nursing facility that removes beds from lay-away may not place beds on lay-away status for one year after the effective date of the removal from lay-away. The commissioner may approve the immediate removal of beds from lay-away if necessary to provide access to those nursing home beds to residents relocated from other nursing homes due to emergency situations or closure. In the event approval is granted, the one-year restriction on placing beds on lay-away after a removal of beds from lay-away shall not apply. Beds may remain on lay-away for up to five years.

Rate Adjustments

The provisions regarding the rate adjustments for lay-away beds is found in Minnesota statute 256B.431, subdivision 30. This statute is explained in a Department of Human Services Bulletin that has been sent or will be sent to all nursing facilities in the near future. Questions regarding the rate adjustments should be directed to:

Greg TaBelle
Minnesota Department of Human Services
Nursing Facility Rates and Policy Division
PO Box 64973
St. Paul, Minnesota 55164-0973
Telephone: (651) 431-2261

Process to Lay-Away Beds

A facility must send a written notice to the commissioner of health asking for beds to be placed on lay-away status. The address is as follows:

Edward P. Ehlinger, MD, MSPH
Minnesota Department of Health
Licensing and Certification Program
P.O. Box 64900
St. Paul, Minnesota 55164-0900
Attention: Mary Henderson
Fax Number: (651) 215-9697

The notice should contain the following information:

  • The requested effective date. The earliest possible effective date is 60 days following the receipt of the request by the Department of Health.

  • The number of beds to be placed on lay-away status including the location of the beds if known. If the facility requires flexibility in the use of two bed rooms as singles, the facility may state the number of beds to be placed on lay-away and that the layaway beds will be taken from double rooms in order to make more single rooms. If the facility has a Medicare distinct part, the specific location of the layaway beds must be provided so that the impact of the lay-away beds on the number of Medicare certified beds may be determined.

Medicare Distinct Part Changes

The Health Care Financing Administration has issued Transmittal 16 of the Medicare State Operations Manual dated May, 2000 which addresses when a facility may make a change in a Medicare distinct part and defines the criteria for a Medicare distinct part. Distinct part changes may only be made at the beginning of a cost reporting year or the beginning of a cost reporting quarter and the request must be made at least 45 days prior to the requested effective date. If the facility is totally Medicare and Medicaid certified, a reduction in certified beds may be made effective with the effective date that beds are put in lay-away status. The Regional Office or the State Agency may not approve two decreases in the bed size of a Medicare distinct part within the same cost reporting year. A copy of Transmittal 16 is being sent to all nursing homes with a separate information bulletin. Please refer to this bulletin and transmittal for additional information regarding Medicare distinct part requirements.

Physical Plant Issues

Lay-away beds will create vacated space in the nursing home. Whether a 2-bed room is converted to a 1-bed or private room, or an entire wing is converted to assisted living, certain physical plant issues must be addressed. The fire safety of the nursing home must not be compromised, the nursing home environment must be preserved, and required common spaces for the nursing home residents must not be diminished.

Fire Safety

If the facility converts a wing, part of a wing, or an entire floor to a use other than nursing home (such as assisted living), the nursing home must maintain compliance with NFPA 101 (Life Safety Code) and the Minnesota Uniform Fire Code. In order to maintain compliance, the facility may elect to continue to maintain ALL spaces as if they were nursing home spaces. As an alternative, the facility may elect to construct an occupancy separation between the nursing home and the alternate use spaces. An occupancy separation is construction having a 2-hour fire resistance rating.

Conversion of multi-bed rooms to 1-bed of private rooms would not normally impact the fire safety of the facility.

Environmental Preservation

In converting nursing home spaces, the facility must address preservation of the nursing home environment. The alternate use of a wing, part of a wing, or an entire floor of the facility must not negatively impact resident privacy, comfort, or well-being. For example, if the space were converted to assisted living, a separate entrance to the assisted living units would be required in order to prevent additional traffic through bedroom areas. Excessive noise from the assisted living area(s) would not be permitted. Noise from radios, televisions, tape and compact disc players may require monitoring and control. The amount of common space available to the nursing home residents must remain in compliance with nursing home licensure rules.

Department Review of Remodeling

Construction plans for the conversion and/or remodeling of space from nursing home to an alternate use must be submitted to the Department for review and approval.

Putting Beds Back Into Service

The statute requires that beds on lay-away have the same status as voluntarily delicensed and decertified beds. As a result, when beds are taken out of lay-away, an inspection of the spaces occupied by these beds may be required. Upon notification of intent to remove beds from lay-away, the Department will determine if the inspection and clearance is needed prior to use of the former lay-away beds.

If you have any questions regarding this Informational Bulletin, please contact in writing:

Minnesota Department of Health
Health Regulation Division
Licensing and Certification Program
85 East Seventh Place, Suite 300
P.O. Box 64900
St. Paul, Minnesota 55164-0900

Updated Wednesday, February 04, 2015 at 03:30PM