1.1 A bill for an act
1.2 relating to health insurance; establishing medical assistance rate adjustments for
1.3 physician and professional services; increasing rates for certain residential services;
1.4 requiring a statewide reimbursement rate for behavioral health home services;
1.5 amending Minnesota Statutes 2024, sections 256.969, subdivision 2b; 256B.0757,
1.6 subdivision 5, by adding a subdivision; 256B.76, subdivisions 1, 6; 256B.761;
1.7 proposing coding for new law in Minnesota Statutes, chapter 256B; repealing
1.8 Minnesota Statutes 2024, section 256B.0625, subdivision 38.
1.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.10 Section 1. Minnesota Statutes 2024, section 256.969, subdivision 2b, is amended to read:
1.11 Subd. 2b.Hospital payment rates.(a) For discharges occurring on or after November
1.121, 2014, hospital inpatient services for hospitals located in Minnesota shall be paid according
1.13to the following:
1.14 (1) critical access hospitals as defined by Medicare shall be paid using a cost-based
1.15methodology;
1.16 (2) long-term hospitals as defined by Medicare shall be paid on a per diem methodology
1.17under subdivision 25;
1.18 (3) rehabilitation hospitals or units of hospitals that are recognized as rehabilitation
1.19distinct parts as defined by Medicare shall be paid according to the methodology under
1.20subdivision 12; and
1.21 (4) all other hospitals shall be paid on a diagnosis-related group (DRG) methodology.
1.22 (b) For the period beginning January 1, 2011, through October 31, 2014, rates shall not
1.23be rebased, except that a Minnesota long-term hospital shall be rebased effective January
1.241, 2011, based on its most recent Medicare cost report ending on or before September 1,
1Section 1.
REVISOR AGW/VJ 25-0246002/07/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 1005
NINETY-FOURTH SESSION
Authored by Bierman, Baker, Noor, Reyer, Backer and others02/17/2025
The bill was read for the first time and referred to the Committee on Health Finance and Policy 2.12008, with the provisions under subdivisions 9 and 23, based on the rates in effect on
2.2December 31, 2010. For rate setting periods after November 1, 2014, in which the base
2.3years are updated, a Minnesota long-term hospital's base year shall remain within the same
2.4period as other hospitals.
2.5 (c) Effective for discharges occurring on and after November 1, 2014, payment rates
2.6for hospital inpatient services provided by hospitals located in Minnesota or the local trade
2.7area, except for the hospitals paid under the methodologies described in paragraph (a),
2.8clauses (2) and (3), shall be rebased, incorporating cost and payment methodologies in a
2.9manner similar to Medicare. The base year or years for the rates effective November 1,
2.102014, shall be calendar year 2012. The rebasing under this paragraph shall be budget neutral,
2.11ensuring that the total aggregate payments under the rebased system are equal to the total
2.12aggregate payments that were made for the same number and types of services in the base
2.13year. Separate budget neutrality calculations shall be determined for payments made to
2.14critical access hospitals and payments made to hospitals paid under the DRG system. Only
2.15the rate increases or decreases under subdivision 3a or 3c that applied to the hospitals being
2.16rebased during the entire base period shall be incorporated into the budget neutrality
2.17calculation.
2.18 (d) For discharges occurring on or after November 1, 2014, through the next rebasing
2.19that occurs, the rebased rates under paragraph (c) that apply to hospitals under paragraph
2.20(a), clause (4), shall include adjustments to the projected rates that result in no greater than
2.21a five percent increase or decrease from the base year payments for any hospital. Any
2.22adjustments to the rates made by the commissioner under this paragraph and paragraph (e)
2.23shall maintain budget neutrality as described in paragraph (c).
2.24 (e) For discharges occurring on or after November 1, 2014, the commissioner may make
2.25additional adjustments to the rebased rates, and when evaluating whether additional
2.26adjustments should be made, the commissioner shall consider the impact of the rates on the
2.27following:
2.28 (1) pediatric services;
2.29 (2) behavioral health services;
2.30 (3) trauma services as defined by the National Uniform Billing Committee;
2.31 (4) transplant services;
2.32 (5) obstetric services, newborn services, and behavioral health services provided by
2.33hospitals outside the seven-county metropolitan area;
2Section 1.
REVISOR AGW/VJ 25-0246002/07/25 3.1 (6) outlier admissions;
3.2 (7) low-volume providers; and
3.3 (8) services provided by small rural hospitals that are not critical access hospitals.
3.4 (f) Hospital payment rates established under paragraph (c) must incorporate the following:
3.5 (1) for hospitals paid under the DRG methodology, the base year payment rate per
3.6admission is standardized by the applicable Medicare wage index and adjusted by the
3.7hospital's disproportionate population adjustment;
3.8 (2) for critical access hospitals, payment rates for discharges between November 1, 2014,
3.9and June 30, 2015, shall be set to the same rate of payment that applied for discharges on
3.10October 31, 2014;
3.11 (3) the cost and charge data used to establish hospital payment rates must only reflect
3.12inpatient services covered by medical assistance; and
3.13 (4) in determining hospital payment rates for discharges occurring on or after the rate
3.14year beginning January 1, 2011, through December 31, 2012, the hospital payment rate per
3.15discharge shall be based on the cost-finding methods and allowable costs of the Medicare
3.16program in effect during the base year or years. In determining hospital payment rates for
3.17discharges in subsequent base years, the per discharge rates shall be based on the cost-finding
3.18methods and allowable costs of the Medicare program in effect during the base year or
3.19years.
3.20 (g) The commissioner shall validate the rates effective November 1, 2014, by applying
3.21the rates established under paragraph (c), and any adjustments made to the rates under
3.22paragraph (d) or (e), to hospital claims paid in calendar year 2013 to determine whether the
3.23total aggregate payments for the same number and types of services under the rebased rates
3.24are equal to the total aggregate payments made during calendar year 2013.
3.25 (h) Effective for discharges occurring on or after July 1, 2017, and every two years
3.26thereafter, payment rates under this section shall be rebased to reflect only those changes
3.27in hospital costs between the existing base year or years and the next base year or years. In
3.28any year that inpatient claims volume falls below the threshold required to ensure a
3.29statistically valid sample of claims, the commissioner may combine claims data from two
3.30consecutive years to serve as the base year. Years in which inpatient claims volume is
3.31reduced or altered due to a pandemic or other public health emergency shall not be used as
3.32a base year or part of a base year if the base year includes more than one year. Changes in
3.33costs between base years shall be measured using the lower of the hospital cost index defined
3Section 1.
REVISOR AGW/VJ 25-0246002/07/25 4.1in subdivision 1, paragraph (a), or the percentage change in the case mix adjusted cost per
4.2claim. The commissioner shall establish the base year for each rebasing period considering
4.3the most recent year or years for which filed Medicare cost reports are available, except
4.4that the base years for the rebasing effective July 1, 2023, are calendar years 2018 and 2019.
4.5The estimated change in the average payment per hospital discharge resulting from a
4.6scheduled rebasing must be calculated and made available to the legislature by January 15
4.7of each year in which rebasing is scheduled to occur, and must include by hospital the
4.8differential in payment rates compared to the individual hospital's costs.
4.9 (i) Effective for discharges occurring on or after July 1, 2015, inpatient payment rates
4.10for critical access hospitals located in Minnesota or the local trade area shall be determined
4.11using a new cost-based methodology. The commissioner shall establish within the
4.12methodology tiers of payment designed to promote efficiency and cost-effectiveness.
4.13Payment rates for hospitals under this paragraph shall be set at a level that does not exceed
4.14the total cost for critical access hospitals as reflected in base year cost reports. Until the
4.15next rebasing that occurs, the new methodology shall result in no greater than a five percent
4.16decrease from the base year payments for any hospital, except a hospital that had payments
4.17that were greater than 100 percent of the hospital's costs in the base year shall have their
4.18rate set equal to 100 percent of costs in the base year. The rates paid for discharges on and
4.19after July 1, 2016, covered under this paragraph shall be increased by the inflation factor
4.20in subdivision 1, paragraph (a). The new cost-based rate shall be the final rate and shall not
4.21be settled to actual incurred costs. Hospitals shall be assigned a payment tier based on the
4.22following criteria:
4.23 (1) hospitals that had payments at or below 80 percent of their costs in the base year
4.24shall have a rate set that equals 85 percent of their base year costs;
4.25 (2) hospitals that had payments that were above 80 percent, up to and including 90
4.26percent of their costs in the base year shall have a rate set that equals 95 percent of their
4.27base year costs; and
4.28 (3) hospitals that had payments that were above 90 percent of their costs in the base year
4.29shall have a rate set that equals 100 percent of their base year costs.
4.30 (j) The commissioner may refine the payment tiers and criteria for critical access hospitals
4.31to coincide with the next rebasing under paragraph (h). The factors used to develop the new
4.32methodology may include, but are not limited to:
4.33 (1) the ratio between the hospital's costs for treating medical assistance patients and the
4.34hospital's charges to the medical assistance program;
4Section 1.
REVISOR AGW/VJ 25-0246002/07/25 5.1 (2) the ratio between the hospital's costs for treating medical assistance patients and the
5.2hospital's payments received from the medical assistance program for the care of medical
5.3assistance patients;
5.4 (3) the ratio between the hospital's charges to the medical assistance program and the
5.5hospital's payments received from the medical assistance program for the care of medical
5.6assistance patients;
5.7 (4) the statewide average increases in the ratios identified in clauses (1), (2), and (3);
5.8 (5) the proportion of that hospital's costs that are administrative and trends in
5.9administrative costs; and
5.10 (6) geographic location.
5.11 (k) Subject to subdivision 2g, effective for discharges occurring on or after January 1,
5.122024, the rates paid to hospitals described in paragraph (a), clauses (2) to (4), must include
5.13a rate factor specific to each hospital that qualifies for a medical education and research
5.14cost distribution under section 62J.692, subdivision 4, paragraph (a).
5.15 (l) Effective for discharges occurring on or after January 1, 2028, the commissioner
5.16must increase:
5.17 (1) payments for inpatient behavioral health services provided by hospitals paid under
5.18the DRG methodology by increasing the adjustment for behavioral health services under
5.19section 256.969, subdivision 2b, paragraph (e); and
5.20 (2) capitation payments made to managed care plans and county-based purchasing plans
5.21to reflect the rate increase provided under this paragraph. Managed care and county-based
5.22purchasing plans must use the capitation rate increase provided under this clause to increase
5.23payment rates for inpatient behavioral health services provided by hospitals paid under the
5.24DRG methodology. The commissioner must monitor the effect of this rate increase on
5.25enrollee access to behavioral health services. If for any contract year federal approval is not
5.26received for this clause, the commissioner must adjust the capitation rates paid to managed
5.27care plans and county-based purchasing plans for that contract year to reflect the removal
5.28of this clause. Contracts between managed care plans and county-based purchasing plans
5.29and providers to whom this paragraph applies must allow recovery of payments from those
5.30providers if capitation rates are adjusted in accordance with this clause. Payment recoveries
5.31must not exceed the amount equal to any increase in rates that results from this paragraph.
5Section 1.
REVISOR AGW/VJ 25-0246002/07/25 6.1 Sec. 2. Minnesota Statutes 2024, section 256B.0757, subdivision 5, is amended to read:
6.2 Subd. 5.Payments.(a) The commissioner shall make payments to each designated
6.3provider for the provision of health home services described in subdivision 3 to each eligible
6.4individual under subdivision 2 that selects the health home as a provider. This paragraph
6.5expires on the date that paragraph (b) becomes effective.
6.6 (b) Effective January 1, 2028, or upon federal approval, whichever is later, the
6.7commissioner shall make payments to each designated provider for the provision of health
6.8home services described in subdivision 3, except for behavioral health services, to each
6.9eligible individual under subdivision 2 who selects the health home as a provider.
6.10 Sec. 3. Minnesota Statutes 2024, section 256B.0757, is amended by adding a subdivision
6.11to read:
6.12 Subd. 5a.Payments for behavioral health home services.(a) Notwithstanding
6.13subdivision 5, the commissioner must implement a single statewide reimbursement rate for
6.14behavioral health home services under this section. The rate must be no less than $425 per
6.15member per month. The commissioner must adjust the statewide reimbursement rate annually
6.16according to the change from the midpoint of the previous rate year to the midpoint of the
6.17rate year for which the rate is being determined using the Centers for Medicare and Medicaid
6.18Services Medicare Economic Index as forecasted in the fourth quarter of the calendar year
6.19before the rate year.
6.20 (b) The commissioner must review and update the behavioral health home services rate
6.21under paragraph (a) at least every four years. The updated rate must account for the average
6.22hours required for behavioral health home team members spent providing services and the
6.23Department of Labor prevailing wage for required behavioral health home team members.
6.24The updated rate must ensure that behavioral health home services rates are sufficient to
6.25allow providers to meet required certifications, training, and practice transformation
6.26standards; staff qualification requirements; and service delivery standards.
6.27 (c) This section is effective January 1, 2028, or upon federal approval, whichever is
6.28later.
6.29 Sec. 4. [256B.757] REIMBURSEMENT RATES FOR OBSTETRIC AND
6.30GYNECOLOGIC SERVICES.
6.31 Subdivision 1.Obstetric and gynecologic minimum rate.Effective for services rendered
6.32on or after January 1, 2026, or the date of federal approval, whichever is later, rates for
6Sec. 4.
REVISOR AGW/VJ 25-0246002/07/25 7.1obstetric and gynecologic services reimbursed under the resource-based relative value scale
7.2must be at least equal to 100 percent of the Medicare Physician Fee Schedule.
7.3 Subd. 2.Capitation payments.Effective for services rendered on or after January 1,
7.42026, or the date of federal approval, whichever is later, the commissioner shall increase
7.5capitation payments made to managed care plans and county-based purchasing plans to
7.6reflect the rate increases provided under this section. Managed care plans and county-based
7.7purchasing plans must use the capitation rate increase provided under this subdivision to
7.8increase payment rates to the providers corresponding to the rate increases. The commissioner
7.9must monitor the effect of this rate increase on enrollee access to services under this section.
7.10If for any contract year federal approval is not received for this subdivision, the commissioner
7.11must adjust the capitation rates paid to managed care plans and county-based purchasing
7.12plans for that contract year to reflect the removal of this subdivision. Contracts between
7.13managed care plans and county-based purchasing plans and providers to whom this
7.14subdivision applies must allow recovery of payments from those providers if capitation
7.15rates are adjusted in accordance with this subdivision. Payment recoveries must not exceed
7.16the amount equal to any increase in rates that results from this subdivision.
7.17 Subd. 3.Medicare physician fee schedule.For purposes of this section, the applicable
7.18Medicare Physician Fee Schedule is the most recent Medicare Physician Fee Schedule Final
7.19Rule issued by the Centers for Medicare and Medicaid Services in effect at the time the
7.20service was rendered.
7.21 EFFECTIVE DATE.Subdivision 3 is effective January 1, 2026, or upon federal
7.22approval, whichever is later. The commissioner shall notify the revisor of statutes when
7.23federal approval is obtained.
7.24 Sec. 5. Minnesota Statutes 2024, section 256B.76, subdivision 1, is amended to read:
7.25 Subdivision 1.Physician and professional services reimbursement.(a) Effective for
7.26services rendered on or after October 1, 1992, the commissioner shall make payments for
7.27physician services as follows:
7.28 (1) payment for level one Centers for Medicare and Medicaid Services' common
7.29procedural coding system codes titled "office and other outpatient services," "preventive
7.30medicine new and established patient," "delivery, antepartum, and postpartum care," "critical
7.31care," cesarean delivery and pharmacologic management provided to psychiatric patients,
7.32and level three codes for enhanced services for prenatal high risk, shall be paid at the lower
7.33of (i) submitted charges, or (ii) 25 percent above the rate in effect on June 30, 1992;
7Sec. 5.
REVISOR AGW/VJ 25-0246002/07/25 8.1 (2) payments for all other services shall be paid at the lower of (i) submitted charges,
8.2or (ii) 15.4 percent above the rate in effect on June 30, 1992; and
8.3 (3) all physician rates shall be converted from the 50th percentile of 1982 to the 50th
8.4percentile of 1989, less the percent in aggregate necessary to equal the above increases
8.5except that payment rates for home health agency services shall be the rates in effect on
8.6September 30, 1992.
8.7 (b) Effective for services rendered on or after January 1, 2000, payment rates for physician
8.8and professional services shall be increased by three percent over the rates in effect on
8.9December 31, 1999, except for home health agency and family planning agency services.
8.10The increases in this paragraph shall be implemented January 1, 2000, for managed care.
8.11 (c) Effective for services rendered on or after July 1, 2009, payment rates for physician
8.12and professional services shall be reduced by five percent, except that for the period July
8.131, 2009, through June 30, 2010, payment rates shall be reduced by 6.5 percent for the medical
8.14assistance and general assistance medical care programs, over the rates in effect on June
8.1530, 2009. This reduction and the reductions in paragraph (d) do not apply to office or other
8.16outpatient visits, preventive medicine visits and family planning visits billed by physicians,
8.17advanced practice registered nurses, or physician assistants in a family planning agency or
8.18in one of the following primary care practices: general practice, general internal medicine,
8.19general pediatrics, general geriatrics, and family medicine. This reduction and the reductions
8.20in paragraph (d) do not apply to federally qualified health centers, rural health centers, and
8.21Indian health services. Effective October 1, 2009, payments made to managed care plans
8.22and county-based purchasing plans under sections 256B.69, 256B.692, and 256L.12 shall
8.23reflect the payment reduction described in this paragraph.
8.24 (d) Effective for services rendered on or after July 1, 2010, payment rates for physician
8.25and professional services shall be reduced an additional seven percent over the five percent
8.26reduction in rates described in paragraph (c). This additional reduction does not apply to
8.27physical therapy services, occupational therapy services, and speech pathology and related
8.28services provided on or after July 1, 2010. This additional reduction does not apply to
8.29physician services billed by a psychiatrist or an advanced practice registered nurse with a
8.30specialty in mental health. Effective October 1, 2010, payments made to managed care plans
8.31and county-based purchasing plans under sections 256B.69, 256B.692, and 256L.12 shall
8.32reflect the payment reduction described in this paragraph.
8.33 (e) Effective for services rendered on or after September 1, 2011, through June 30, 2013,
8.34payment rates for physician and professional services shall be reduced three percent from
8Sec. 5.
REVISOR AGW/VJ 25-0246002/07/25 9.1the rates in effect on August 31, 2011. This reduction does not apply to physical therapy
9.2services, occupational therapy services, and speech pathology and related services.
9.3 (f) Effective for services rendered on or after September 1, 2014, payment rates for
9.4physician and professional services, including physical therapy, occupational therapy, speech
9.5pathology, and mental health services shall be increased by five percent from the rates in
9.6effect on August 31, 2014. In calculating this rate increase, the commissioner shall not
9.7include in the base rate for August 31, 2014, the rate increase provided under section
9.8256B.76, subdivision 7. This increase does not apply to federally qualified health centers,
9.9rural health centers, and Indian health services. Payments made to managed care plans and
9.10county-based purchasing plans shall not be adjusted to reflect payments under this paragraph.
9.11 (g) (a) Effective for services rendered on or after July 1, 2015, payment rates for physical
9.12therapy, occupational therapy, and speech pathology and related services provided by a
9.13hospital meeting the criteria specified in section 62Q.19, subdivision 1, paragraph (a), clause
9.14(4), shall be increased by 90 percent from the rates in effect on June 30, 2015. Payments
9.15made to managed care plans and county-based purchasing plans shall not be adjusted to
9.16reflect payments under this paragraph.
9.17 (h) (b) Any ratables effective before July 1, 2015, do not apply to early intensive
9.18developmental and behavioral intervention (EIDBI) benefits described in section 256B.0949.
9.19 (i) (c) The commissioner may reimburse physicians and other licensed professionals for
9.20costs incurred to pay the fee for testing newborns who are medical assistance enrollees for
9.21heritable and congenital disorders under section 144.125, subdivision 1, paragraph (c), when
9.22the sample is collected outside of an inpatient hospital or freestanding birth center and the
9.23cost is not recognized by another payment source.
9.24 EFFECTIVE DATE.This section is effective January 1, 2026, or upon federal approval
9.25of the amendments in this act to section 256B.76, subdivision 6, whichever is later. The
9.26commissioner of human services shall notify the revisor of statutes when federal approval
9.27is obtained.
9.28 Sec. 6. Minnesota Statutes 2024, section 256B.76, subdivision 6, is amended to read:
9.29 Subd. 6.Medicare relative value units.(a) Effective for services rendered on or after
9.30January 1, 2007, the commissioner shall make payments for physician and professional
9.31services based on the Medicare relative value units (RVUs). This change shall be budget
9.32neutral and the cost of implementing RVUs will be incorporated in the established conversion
9.33factor. This paragraph expires on the date that paragraph (b) becomes effective.
9Sec. 6.
REVISOR AGW/VJ 25-0246002/07/25 10.1 (b) Effective January 1, 2026, or upon federal approval, whichever is later, and effective
10.2for services rendered on or after January 1, 2007, the commissioner shall make payments
10.3for physician and professional services based on the Medicare relative value units (RVUs).
10.4 (b) (c) Effective for services rendered on or after January 1, 2025, rates for mental health
10.5services reimbursed under the resource-based relative value scale (RBRVS) must be equal
10.6to 83 percent of the Medicare Physician Fee Schedule. This paragraph expires on the date
10.7that paragraph (d) becomes effective.
10.8 (d) Effective January 1, 2026, or upon federal approval, whichever is later, and effective
10.9for services rendered on or after January 1, 2026, or the date of federal approval, whichever
10.10is later, rates for all physician and professional services must be at least equal to 100 percent
10.11of the Medicare Physician Fee Schedule.
10.12 (c) (e) Effective for services rendered on or after January 1, 2025, the commissioner
10.13shall increase capitation payments made to managed care plans and county-based purchasing
10.14plans to reflect the rate increases provided under this subdivision. Managed care plans and
10.15county-based purchasing plans must use the capitation rate increase provided under this
10.16paragraph to increase payment rates to the providers corresponding to the rate increases.
10.17The commissioner must monitor the effect of this rate increase on enrollee access to services
10.18under this subdivision. If for any contract year federal approval is not received for this
10.19paragraph, the commissioner must adjust the capitation rates paid to managed care plans
10.20and county-based purchasing plans for that contract year to reflect the removal of this
10.21paragraph. Contracts between managed care plans and county-based purchasing plans and
10.22providers to whom this paragraph applies must allow recovery of payments from those
10.23providers if capitation rates are adjusted in accordance with this paragraph. Payment
10.24recoveries must not exceed the amount equal to any increase in rates that results from this
10.25paragraph.
10.26 (f) For purposes of this subdivision, the applicable Medicare Physician Fee Schedule is
10.27the most recent Medicare Physician Fee Schedule Final Rule issued by the Centers for
10.28Medicare and Medicaid Services in effect at the time the service was rendered.
10.29 EFFECTIVE DATE.Paragraph (f) is effective January 1, 2026, or upon federal
10.30approval, whichever is later. The commissioner of human services shall notify the revisor
10.31of statutes when federal approval is obtained.
10Sec. 6.
REVISOR AGW/VJ 25-0246002/07/25 11.1 Sec. 7. Minnesota Statutes 2024, section 256B.761, is amended to read:
11.2 256B.761 REIMBURSEMENT FOR MENTAL HEALTH SERVICES.
11.3 (a) Effective for services rendered on or after July 1, 2001, payment for medication
11.4management provided to psychiatric patients, outpatient mental health services, day treatment
11.5services, home-based mental health services, and family community support services shall
11.6be paid at the lower of (1) submitted charges, or (2) 75.6 percent of the 50th percentile of
11.71999 charges.
11.8 (b) Effective July 1, 2001, the medical assistance rates for outpatient mental health
11.9services provided by an entity that operates: (1) a Medicare-certified comprehensive
11.10outpatient rehabilitation facility; and (2) a facility that was certified prior to January 1, 1993,
11.11with at least 33 percent of the clients receiving rehabilitation services in the most recent
11.12calendar year who are medical assistance recipients, will be increased by 38 percent, when
11.13those services are provided within the comprehensive outpatient rehabilitation facility and
11.14provided to residents of nursing facilities owned by the entity.
11.15 (c) In addition to rate increases otherwise provided, the commissioner may restructure
11.16coverage policy and rates to improve access to adult rehabilitative mental health services
11.17under section 256B.0623 and related mental health support services under section 256B.021,
11.18subdivision 4, paragraph (f), clause (2). For state fiscal years 2015 and 2016, the projected
11.19state share of increased costs due to this paragraph is transferred from adult mental health
11.20grants under sections 245.4661 and 256K.10. The transfer for fiscal year 2016 is a permanent
11.21base adjustment for subsequent fiscal years. Payments made to managed care plans and
11.22county-based purchasing plans under sections 256B.69, 256B.692, and 256L.12 shall reflect
11.23the rate changes described in this paragraph.
11.24 (d) Any ratables effective before July 1, 2015, do not apply to early intensive
11.25developmental and behavioral intervention (EIDBI) benefits described in section 256B.0949.
11.26 (e) Effective for services rendered on or after January 1, 2024, payment rates for
11.27behavioral health services included in the rate analysis required by Laws 2021, First Special
11.28Session chapter 7, article 17, section 18, except for adult day treatment services under section
11.29256B.0671, subdivision 3; early intensive developmental and behavioral intervention services
11.30under section 256B.0949; and substance use disorder services under chapter 254B, must be
11.31increased by three percent from the rates in effect on December 31, 2023. Effective for
11.32services rendered on or after January 1, 2025, payment rates for behavioral health services
11.33included in the rate analysis required by Laws 2021, First Special Session chapter 7, article
11.3417, section 18; early intensive developmental behavioral intervention services under section
11Sec. 7.
REVISOR AGW/VJ 25-0246002/07/25 12.1256B.0949; and substance use disorder services under chapter 254B, must be annually
12.2adjusted according to the change from the midpoint of the previous rate year to the midpoint
12.3of the rate year for which the rate is being determined using the Centers for Medicare and
12.4Medicaid Services Medicare Economic Index as forecasted in the fourth quarter of the
12.5calendar year before the rate year. For payments made in accordance with this paragraph,
12.6if and to the extent that the commissioner identifies that the state has received federal
12.7financial participation for behavioral health services in excess of the amount allowed under
12.8United States Code, title 42, section 447.321, the state shall repay the excess amount to the
12.9Centers for Medicare and Medicaid Services with state money and maintain the full payment
12.10rate under this paragraph. This paragraph does not apply to federally qualified health centers,
12.11rural health centers, Indian health services, certified community behavioral health clinics,
12.12cost-based rates, and rates that are negotiated with the county. This paragraph expires upon
12.13legislative implementation of the new rate methodology resulting from the rate analysis
12.14required by Laws 2021, First Special Session chapter 7, article 17, section 18.
12.15 (f) Effective January 1, 2024, the commissioner shall increase capitation payments made
12.16to managed care plans and county-based purchasing plans to reflect the behavioral health
12.17service rate increase provided in paragraph (e). Managed care and county-based purchasing
12.18plans must use the capitation rate increase provided under this paragraph to increase payment
12.19rates to behavioral health services providers. The commissioner must monitor the effect of
12.20this rate increase on enrollee access to behavioral health services. If for any contract year
12.21federal approval is not received for this paragraph, the commissioner must adjust the
12.22capitation rates paid to managed care plans and county-based purchasing plans for that
12.23contract year to reflect the removal of this provision. Contracts between managed care plans
12.24and county-based purchasing plans and providers to whom this paragraph applies must
12.25allow recovery of payments from those providers if capitation rates are adjusted in accordance
12.26with this paragraph. Payment recoveries must not exceed the amount equal to any increase
12.27in rates that results from this provision.
12.28 (g) Effective for services rendered on or after January 1, 2026, or the date of federal
12.29approval, whichever is later:
12.30 (1) rates for mental health services reimbursed under the resource-based relative value
12.31scale must be at least equal to 100 percent of the Medicare Physician Fee Schedule; and
12.32 (2) the commissioner must increase capitation payments made to managed care plans
12.33and county-based purchasing plans to reflect the rate increases provided under this paragraph.
12.34Managed care plans and county-based purchasing plans must use the capitation rate increase
12.35provided under this clause to increase payment rates to the providers corresponding to the
12Sec. 7.
REVISOR AGW/VJ 25-0246002/07/25 13.1rate increases. The commissioner must monitor the effect of this rate increase on enrollee
13.2access to services under this paragraph. If for any contract year federal approval is not
13.3received for this clause, the commissioner must adjust the capitation rates paid to managed
13.4care plans and county-based purchasing plans for that contract year to reflect the removal
13.5of this clause. Contracts between managed care plans and county-based purchasing plans
13.6and providers to whom this clause applies must allow recovery of payments from those
13.7providers if capitation rates are adjusted in accordance with this clause. Payment recoveries
13.8must not exceed the amount equal to any increase in rates that results from this clause.
13.9 (h) Effective for services under this section billed and coded under Healthcare Common
13.10Procedure Coding System H, T, and S, and rendered on or after January 1, 2027, or the date
13.11of federal approval, whichever is later, the commissioner must increase reimbursement rates
13.12as necessary to align with the Medicare Physician Fee Schedule.
13.13 (i) Effective for children's therapeutic supports and services under section 256B.0943,
13.14subdivision 2, and services under section 245.488, rendered on or after January 1, 2026, or
13.15the date of federal approval, whichever is later, the commissioner must increase:
13.16 (1) reimbursement rates as necessary to align with the Medicare Physician Fee Schedule;
13.17and
13.18 (2) capitation payments made to managed care plans and county-based purchasing plans
13.19to reflect the rate increases provided under this paragraph. Managed care plans and
13.20county-based purchasing plans must use the capitation rate increase provided under this
13.21clause to increase payment rates to the providers corresponding to the rate increases. The
13.22commissioner must monitor the effect of this rate increase on enrollee access to services
13.23under this paragraph. If for any contract year federal approval is not received for this clause,
13.24the commissioner must adjust the capitation rates paid to managed care plans and
13.25county-based purchasing plans for that contract year to reflect the removal of this clause.
13.26Contracts between managed care plans and county-based purchasing plans and providers
13.27to whom this clause applies must allow recovery of payments from those providers if
13.28capitation rates are adjusted in accordance with this clause. Payment recoveries must not
13.29exceed the amount equal to any increase in rates that results from this clause.
13.30 (j) Paragraph (i) does not apply to federally qualified health centers, rural health centers,
13.31Indian health services, certified community behavioral health clinics, cost-based rates,
13.32psychiatric residential treatment facilities, and children's residential services and rates that
13.33are negotiated with the county.
13Sec. 7.
REVISOR AGW/VJ 25-0246002/07/25 14.1 (k) For behavioral health services included in the rate analysis required by Laws 2021,
14.2First Special Session chapter 7, article 17, section 18, except for adult day treatment services
14.3under section 256B.0671, subdivision 3; early intensive developmental and behavioral
14.4intervention services under section 256B.0949; and substance use disorder services under
14.5chapter 254B, managed care plans and county-based purchasing plans must reimburse the
14.6providers at a rate that is at least equal to the fee-for-service payment rate. The commissioner
14.7must monitor the effect of this requirement on the rate of access to the services delivered
14.8by providers of behavioral health services.
14.9 (l) For purposes of this section, the applicable Medicare Physician Fee Schedule is the
14.10most recent Medicare Physician Fee Schedule Final Rule issued by the Centers for Medicare
14.11and Medicaid Services in effect at the time the service was rendered.
14.12 EFFECTIVE DATE.Paragraphs (j) to (l) are effective January 1, 2026, or upon federal
14.13approval, whichever is later. The commissioner shall notify the revisor of statutes when
14.14federal approval is obtained.
14.15Sec. 8. [256B.7662] REIMBURSEMENT RATES FOR PRIMARY CARE SERVICES.
14.16 Subdivision 1.Primary care minimum rate.Effective for services rendered on or after
14.17January 1, 2026, or the date of federal approval, whichever is later, rates for primary care
14.18services reimbursed under the resource-based relative value scale must be at least equal to
14.19100 percent of the Medicare Physician Fee Schedule.
14.20 Subd. 2.Capitation payments.Effective for services rendered on or after January 1,
14.212026, or the date of federal approval, whichever is later, the commissioner shall increase
14.22capitation payments made to managed care plans and county-based purchasing plans to
14.23reflect the rate increases provided under this section. Managed care plans and county-based
14.24purchasing plans must use the capitation rate increase provided under this subdivision to
14.25increase payment rates to the providers corresponding to the rate increases. The commissioner
14.26must monitor the effect of this rate increase on enrollee access to services under this section.
14.27If for any contract year federal approval is not received for this subdivision, the commissioner
14.28must adjust the capitation rates paid to managed care plans and county-based purchasing
14.29plans for that contract year to reflect the removal of this subdivision. Contracts between
14.30managed care plans and county-based purchasing plans and providers to whom this
14.31subdivision applies must allow recovery of payments from those providers if capitation
14.32rates are adjusted in accordance with this subdivision. Payment recoveries must not exceed
14.33the amount equal to any increase in rates that results from this subdivision.
14Sec. 8.
REVISOR AGW/VJ 25-0246002/07/25 15.1 Subd. 3.Medicare physician fee schedule.For purposes of this section, the applicable
15.2Medicare Physician Fee Schedule is the most recent Medicare Physician Fee Schedule Final
15.3Rule issued by the Centers for Medicare and Medicaid Services in effect at the time the
15.4service was rendered.
15.5 EFFECTIVE DATE.Subdivision 3 is effective January 1, 2026, or upon federal
15.6approval, whichever is later. The commissioner shall notify the revisor of statutes when
15.7federal approval is obtained.
15.8 Sec. 9. REPEALER.
15.9 Minnesota Statutes 2024, section 256B.0625, subdivision 38, is repealed.
15.10 EFFECTIVE DATE.This section is effective January 1, 2027, or upon federal approval,
15.11whichever is later. The commissioner of human services shall notify the revisor of statutes
15.12when federal approval is obtained.
15Sec. 9.
REVISOR AGW/VJ 25-0246002/07/25 256B.0625 COVERED SERVICES.
Subd. 38. Payments for mental health services.Payments for mental health services covered
under the medical assistance program that are provided by masters-prepared mental health
professionals shall be 80 percent of the rate paid to doctoral-prepared professionals. Payments for
mental health services covered under the medical assistance program that are provided by
masters-prepared mental health professionals employed by community mental health centers shall
be 100 percent of the rate paid to doctoral-prepared professionals. Payments for mental health
services covered under the medical assistance program that are provided by physician assistants
shall be 80.4 percent of the base rate paid to psychiatrists.
1R
APPENDIX
Repealed Minnesota Statutes: 25-02460