Minnesota 2025-2026 Regular Session

Minnesota House Bill HF2057 Compare Versions

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1	1	1.1 A bill for an act
2	2	1.2 relating to human services; imposing an assessment on hospitals; requiring directed
3	3	1.3 payments to hospitals in the medical assistance program; requiring reports;
4	4	1.4 amending Minnesota Statutes 2024, sections 256.9657, by adding a subdivision;
5	5	1.5 256B.1973, by adding a subdivision; proposing coding for new law in Minnesota
6	6	1.6 Statutes, chapter 256B.
7	7	1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
8	8	1.8 Section 1. Minnesota Statutes 2024, section 256.9657, is amended by adding a subdivision
9	9	1.9to read:
10	10	1.10 Subd. 2b.Hospital assessment.(a) For purposes of this subdivision, the following terms
11	11	1.11have the meanings given:
12	12	1.12 (1) "eligible hospital" means a hospital that participates in Minnesota's medical assistance
13	13	1.13program;
14	14	1.14 (2) "net inpatient revenue" means the value stated on line ... on worksheet ..., part ..., of
15	15	1.15the hospital's most recent Medicare cost report filed and showing in the Healthcare Cost
16	16	1.16Report Information System (HCRIS) as of October 1 of each year; and
17	17	1.17 (3) "net outpatient revenue" means the value stated on line ... on worksheet ..., part ...,
18	18	1.18of the hospital's most recent Medicare cost report filed and showing in HCRIS as of October
19	19	1.191 of each year.
20	20	1.20 (b) Subject to paragraph (k), each eligible hospital must pay to the hospital directed
21	21	1.21payment program account established under section 256B.1975 an assessment equal to the
22	22	1.22sum of the following:
23	23	1.23 (1) ... percent of the hospital's net inpatient revenue; and
24	24	1Section 1.
25	25	REVISOR AGW/BM 25-0429203/06/25
26	26	State of Minnesota
27	27	This Document can be made available
28	28	in alternative formats upon request
29	29	HOUSE OF REPRESENTATIVES
30	30	H. F. No. 2057
31	31	NINETY-FOURTH SESSION
32	32	Authored by Nadeau03/10/2025
33	33	The bill was read for the first time and referred to the Committee on Health Finance and Policy 2.1 (2) ... percent of the hospital's net outpatient revenue.
34	34	2.2 (c) Assessments are due on January 1, April 1, July 1, and October 1 each year.
35	35	2.3Assessments must be paid quarterly in the form and manner specified by the commissioner.
36	36	2.4 (d) Invoices for the assessments are due December 1, March 1, June 1, and September
37	37	2.51 each year.
38	38	2.6 (e) If any of the dates for assessments or invoices in paragraphs (c) and (d) falls on a
39	39	2.7holiday, the applicable date is the next business day.
40	40	2.8 (f) The commissioner must notify each eligible hospital of its estimated assessment
41	41	2.9amount for the subsequent year by October 15 each year.
42	42	2.10 (g) A hospital is not required to pay the assessment until the start of the first full fiscal
43	43	2.11year the hospital is an eligible hospital. A hospital that has merged with another hospital
44	44	2.12must have the hospital's assessment revised at the start of the first full fiscal year after the
45	45	2.13merger is complete. A closed hospital is retroactively responsible for assessments owed for
46	46	2.14services provided through the final date of operations.
47	47	2.15 (h) If the commissioner determines that a hospital has underpaid or overpaid assessments,
48	48	2.16the commissioner must notify the hospital of the unpaid assessments or of any refund due.
49	49	2.17A hospital that disputes the amount of an assessment by the commissioner may dispute the
50	50	2.18assessment utilizing any remedy available in law related to provider payments in medical
51	51	2.19assistance.
52	52	2.20 (i) Revenue from the assessment must only be used by the commissioner to pay the
53	53	2.21nonfederal share of the directed payment program under section 256B.1974.
54	54	2.22 (j) The commissioner is prohibited from collecting any assessment under this subdivision
55	55	2.23during any period of time when:
56	56	2.24 (1) federal financial participation is unavailable or disallowed; or
57	57	2.25 (2) a directed payment under section 256B.1974 is not approved by the Centers for
58	58	2.26Medicare and Medicaid Services.
59	59	2.27 (k) The commissioner must make the following discounts or exemptions from the
60	60	2.28assessment under this subdivision, or as necessary, to achieve federal approval of the
61	61	2.29assessment in this section:
62	62	2.30 (1) a long-term care hospital, as defined in Code of Federal Regulations, title 42, section
63	63	2.31412.23, paragraph (e);
64	64	2Section 1.
65	65	REVISOR AGW/BM 25-0429203/06/25 3.1 (2) each critical access hospital or independent hospital in rural Minnesota paid under
66	66	3.2the Medicare prospective payment system to the maximum extent necessary to meet the
67	67	3.3federal law requirements for this assessment;
68	68	3.4 (3) any hospital in Minnesota designated as a children's hospital under Code of Federal
69	69	3.5Regulation, title 42, section 412.23, paragraph (d), to the maximum extent necessary to
70	70	3.6meet the federal law requirements for this assessment;
71	71	3.7 (4) federal Indian Health Service facilities;
72	72	3.8 (5) state-owned or state-operated regional treatment centers and all state-operated services;
73	73	3.9 (6) a discount assessment for a hospital that is a nonstate government teaching hospital
74	74	3.10with high medical assistance utilization and a level 1 trauma center to the maximum extent
75	75	3.11necessary to meet the federal law requirements for this assessment; and
76	76	3.12 (7) a discount assessment at the level necessary to ensure that no single hospital system
77	77	3.13is responsible for greater than ... percent of the total assessments collected statewide on an
78	78	3.14annual basis.
79	79	3.15 (l) The commissioner must reduce the assessment on a uniform percentage basis across
80	80	3.16eligible hospitals on which the assessment is imposed, such that the aggregate amount
81	81	3.17collected from hospitals under this subdivision does not exceed the total amount needed for
82	82	3.18the annual nonfederal share of the directed payments authorized by section 256B.1974.
83	83	3.19 (m) Hospitals subject to the assessment under this subdivision must submit to the
84	84	3.20commissioner, in the form and manner specified by the commissioner and annually agreed
85	85	3.21to in writing by the Minnesota Hospital Association, all documentation necessary to
86	86	3.22determine the assessment amounts under this subdivision.
87	87	3.23 EFFECTIVE DATE.(a) This section is effective the later of January 1, 2026, or federal
88	88	3.24approval of all of the following:
89	89	3.25 (1) this section; and
90	90	3.26 (2) the amendments in this act to Minnesota Statutes, sections 256B.1973 and 256B.1974.
91	91	3.27 (b) The commissioner of human services shall notify the revisor of statutes when federal
92	92	3.28approval is obtained.
93	93	3Section 1.
94	94	REVISOR AGW/BM 25-0429203/06/25 4.1 Sec. 2. Minnesota Statutes 2024, section 256B.1973, is amended by adding a subdivision
95	95	4.2to read:
96	96	4.3 Subd. 9.Interaction with other directed payments.Nothing in this section precludes
97	97	4.4an eligible provider under subdivision 3 from participating in the hospital directed payment
98	98	4.5program under section 256B.1974. A provider participating in the hospital directed payment
99	99	4.6program must not receive a directed payment under this section for any provider classes
100	100	4.7paid via the hospital directed payment program. A hospital subject to this section must
101	101	4.8notify the commissioner in writing no later than 30 days after enactment of this subdivision
102	102	4.9of their intention to participate in the hospital directed payment program under section
103	103	4.10256B.1974.
104	104	4.11 EFFECTIVE DATE.(a) This section is effective on the later of January 1, 2026, or
105	105	4.12federal approval of all of the following:
106	106	4.13 (1) the amendments in this act to add Minnesota Statutes, section 256.9657, subdivision
107	107	4.142b; and
108	108	4.15 (2) the amendments in this act to Minnesota Statutes, section 256B.1974.
109	109	4.16 (b) The commissioner of human services shall notify the revisor of statutes when federal
110	110	4.17approval is obtained.
111	111	4.18 Sec. 3. [256B.1974] HOSPITAL DIRECTED PAYMENT PROGRAM.
112	112	4.19 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
113	113	4.20the meanings given.
114	114	4.21 (b) "Health plan" means a managed care or county-based purchasing plan that is under
115	115	4.22contract with the commissioner to deliver services to medical assistance enrollees under
116	116	4.23section 256B.69.
117	117	4.24 (c) "Hospital" means a hospital licensed under section 144.50.
118	118	4.25 Subd. 2.Federal approval required.The hospital directed payment program is
119	119	4.26contingent on federal approval and must conform with the requirements for permissible
120	120	4.27directed managed care organization expenditures under section 256B.6928, subdivision 5.
121	121	4.28 Subd. 3.Commissioner's duties; state-directed fee schedule requirement.(a) For
122	122	4.29each federally approved directed payment program that is a state-directed fee schedule
123	123	4.30requirement the commissioner must determine a quarterly payment amount to be submitted
124	124	4.31by an eligible provider to a health plan. The commissioner must determine the quarterly
125	125	4.32payment amount using the average commercial payer rate, or using another method
126	126	4Sec. 3.
127	127	REVISOR AGW/BM 25-0429203/06/25 5.1acceptable to the Centers for Medicare and Medicaid Services if the average commercial
128	128	5.2payer rate is not approved, minus the amount necessary for the plan to satisfy assessment
129	129	5.3liabilities under sections 256.9657 and 297I.05 attributable to the directed payment program.
130	130	5.4The commissioner must ensure that the application of the quarterly payment amounts
131	131	5.5maximizes the allowable directed payments and does not result in payments exceeding
132	132	5.6federal limits. The commissioner may use an annual settle-up process. The directed payment
133	133	5.7program must be specific to each health plan and prospectively incorporated into capitation
134	134	5.8payments for that plan.
135	135	5.9 (b) For each federally approved directed payment program that is a state-directed fee
136	136	5.10schedule requirement, the commissioner must develop a plan for the initial implementation
137	137	5.11of the state-directed fee schedule requirement to ensure that the eligible provider receives
138	138	5.12the entire permissible value of the federally approved directed payment. If federal approval
139	139	5.13of a directed payment under this subdivision is retroactive, the commissioner must make a
140	140	5.14onetime pro rata increase to the quarterly payment amount and the initial payments to include
141	141	5.15claims submitted between the retroactive federal approval date and the period captured by
142	142	5.16the initial payments.
143	143	5.17 (c) Directed payments under this section must only be used to supplement, and not
144	144	5.18supplant, medical assistance reimbursement to hospitals. The directed payment program
145	145	5.19must not modify, reduce, or offset the medical assistance payment rates determined for each
146	146	5.20hospital as required by section 256.969.
147	147	5.21 (d) The commissioner must require managed care organizations to make quarterly
148	148	5.22supplemental directed payments according to this section. Each calendar year, the
149	149	5.23commissioner must require managed care organizations to pay the maximum amount out
150	150	5.24of these funds as directed payments. The commissioner must require managed care
151	151	5.25organizations to make quarterly supplemental directed payments using electronic funds
152	152	5.26transfers, if the hospital provides the information necessary to process such transfers, and
153	153	5.27in accordance with directions provided by the commissioner, within five business days of
154	154	5.28the date the funds are paid to the managed care organizations, as calculated by the date that
155	155	5.29the commissioner issued sufficient payments to the managed care organization to make the
156	156	5.30directed payments according to this section. If funds are not paid to the managed care
157	157	5.31organizations by the commissioner by electronic funds transfer, any directed payment must
158	158	5.32be made within seven business days of the date the money was actually received by the
159	159	5.33managed care organization. The managed care organization must be considered to have
160	160	5.34paid the directed payments when the payment remittance number is generated, or on the
161	161	5.35date the managed care organization sends the check to the hospital if electronic money
162	162	5Sec. 3.
163	163	REVISOR AGW/BM 25-0429203/06/25 6.1transfer information is not supplied. If a managed care organization is late in paying a
164	164	6.2directed payment as required under this section, including any extensions granted by the
165	165	6.3commissioner, the managed care organization must pay a penalty, unless waived by the
166	166	6.4commissioner for reasonable cause, to the commissioner equal to five percent of the amount
167	167	6.5of the directed payment not paid on or before the due date plus five percent of the portion
168	168	6.6remaining unpaid on the last day of each thirty day period thereafter. Payments to managed
169	169	6.7care organizations that would be paid consistent with actuarial certification and enrollment
170	170	6.8in the absence of the increased capitation payments under this section must not be reduced
171	171	6.9as a consequence of payments made under this section. The commissioner must publish
172	172	6.10and maintain on its website for a period of no less than eight calendar quarters the total
173	173	6.11quarterly calculation of directed payments owed to each hospital from each managed care
174	174	6.12organization. All calculations and reports must be posted no later than the first day of the
175	175	6.13quarter for which the payments are to be issued.
176	176	6.14 (e) By December 1 each year, the commissioner must notify each hospital of any changes
177	177	6.15to the payment methodologies in this section, including but not limited to changes in the
178	178	6.16fixed rate directed payment rates, the aggregate directed payment amount for all hospitals,
179	179	6.17and the hospital's directed payment amount for the upcoming calendar year.
180	180	6.18 (f) The commissioner must distribute payments required under this section within 30
181	181	6.19days of the assessment being received and must pay the directed payments to managed care
182	182	6.20organizations under contract no later than January 1, April 1, July 1, and October 1 each
183	183	6.21year.
184	184	6.22 (g) A hospital is not entitled to payments under this section until the start of the first full
185	185	6.23fiscal year it is an eligible hospital. A hospital that has merged with another hospital must
186	186	6.24have its payments under this section revised at the start of the first full fiscal year after the
187	187	6.25merger is complete. A closed hospital is entitled to the payments under this section for
188	188	6.26services provided through the final date of operations.
189	189	6.27 Subd. 4.Health plan duties; submission of claims.Each health plan must submit to
190	190	6.28the commissioner, in accordance with its contract with the commissioner to serve as a
191	191	6.29managed care organization in medical assistance, payment information for each claim paid
192	192	6.30to an eligible provider for services provided to a medical assistance enrollee. Health plans
193	193	6.31must allow each hospital to review the health plan's own paid claims detail to enable proper
194	194	6.32validation that the medical assistance managed care claims volume and content is consistent
195	195	6.33with the hospital's internal records. To support the validation process for the directed payment
196	196	6.34program, managed care organizations must permit the commissioner to share inpatient and
197	197	6.35outpatient claims-level details with hospitals identifying only those claims where the prepaid
198	198	6Sec. 3.
199	199	REVISOR AGW/BM 25-0429203/06/25 7.1medical assistance program under section 256B.69 is the payer source. Hospitals must
200	200	7.2provide notice of discrepancies in claims paid to the commissioner in a form determined
201	201	7.3by the commissioner. The commissioner is authorized to determine the final disposition of
202	202	7.4the validation process for disputed claims.
203	203	7.5 Subd. 5.Health plan duties; directed payment add-on.(a) Each health plan must
204	204	7.6make, in accordance with its contract with the commissioner to serve as a managed care
205	205	7.7organization in medical assistance, a directed payment to the eligible provider in an amount
206	206	7.8equal to the payment amounts the plan received from the commissioner as a quarterly
207	207	7.9payment amount and on the same basis and calendar year timing for all health plans.
208	208	7.10 (b) Managed care organizations are prohibited from:
209	209	7.11 (1) setting, establishing, or negotiating reimbursement rates with a hospital in a manner
210	210	7.12that directly or indirectly takes into account a directed payment that a hospital receives
211	211	7.13under this section;
212	212	7.14 (2) unnecessarily delaying a directed payment to a hospital; or
213	213	7.15 (3) recouping or offsetting a directed payment for any reason, except as expressly
214	214	7.16authorized by the commissioner.
215	215	7.17 Subd. 6.Hospital duties; quarterly supplemental directed payment add-on.(a) A
216	216	7.18hospital receiving a directed payment under this section is prohibited from:
217	217	7.19 (1) setting, establishing, or negotiating reimbursement rates with a managed care
218	218	7.20organization in a manner that directly or indirectly takes into account a directed payment
219	219	7.21that a hospital receives under this section; or
220	220	7.22 (2) directly passing on the cost of an assessment to patients or nonmedical assistance
221	221	7.23payers, including as a fee or rate increase.
222	222	7.24 (b) A hospital that violates this subdivision is prohibited from receiving a directed
223	223	7.25payment under this section for the remainder of the rate year. This subdivision does not
224	224	7.26prohibit a hospital from negotiating with a payer for a rate increase.
225	225	7.27 (c) Any hospital receiving a directed payment under this section must meet the
226	226	7.28commissioner's standards for directed payments as described in subdivision 7.
227	227	7.29 Subd. 7.State minimum policy goals established.(a) The effect of the directed
228	228	7.30payments under this section must align with the state's policy goals for medical assistance
229	229	7.31enrollees. The directed payments must be used to maintain quality and access to a full range
230	230	7.32of health care delivery mechanisms for medical assistance enrollees.
231	231	7Sec. 3.
232	232	REVISOR AGW/BM 25-0429203/06/25 8.1 (b) The commissioner, in consultation with the Minnesota Hospital Association, must
233	233	8.2submit to the Centers for Medicare and Medicaid Services a methodology to regularly
234	234	8.3measure access to care and the achievement of state policy goals described in this subdivision.
235	235	8.4 Subd. 8.Administrative review.Before making the payments required under this
236	236	8.5section, and on at least an annual basis, the commissioner must consult with and provide
237	237	8.6for review of the payment amounts by a permanent select committee established by the
238	238	8.7Minnesota Hospital Association. Any data or information reviewed by members of the
239	239	8.8committee are data not on individuals, as defined in section 13.02. The committee's members
240	240	8.9may not include any current employee or paid consultant of any hospital.
241	241	8.10 EFFECTIVE DATE.This section is effective the later of January 1, 2026, or federal
242	242	8.11approval for all of the following:
243	243	8.12 (1) the amendments in this act to add Minnesota Statutes, section 256.9657, subdivision
244	244	8.132b; and
245	245	8.14 (2) the amendments in this act to this section.
246	246	8.15 (b) The commissioner of human services shall notify the revisor of statutes when federal
247	247	8.16approval is obtained.
248	248	8.17 Sec. 4. [256B.1975] HOSPITAL DIRECTED PAYMENT PROGRAM ACCOUNT.
249	249	8.18 Subdivision 1.Account established; appropriation.(a) The hospital directed payment
250	250	8.19program account is created in the special revenue fund in the state treasury.
251	251	8.20 (b) Money in the account, including interest earned, is annually appropriated to the
252	252	8.21commissioner for the purposes specified in section 256B.1974.
253	253	8.22 (c) Transfers from this account to the general fund are prohibited.
254	254	8.23 Subd. 2.Reports to the legislature.By January 15, 2027, and each January 15 thereafter,
255	255	8.24the commissioner must submit a report to the chairs and ranking minority members of the
256	256	8.25legislative committees with jurisdiction over health and human services policy and finance
257	257	8.26that details the activities and uses of money in the hospital directed payment program
258	258	8.27account, including the metrics and outcomes of the policy goals established by section
259	259	8.28256B.1974, subdivision 7.
260	260	8.29 EFFECTIVE DATE.(a) This section is effective on the later of January 1, 2026, or
261	261	8.30federal approval of the amendments in this act to add section 256.9657, subdivision 2b.
262	262	8.31 (b) The commissioner of human services shall notify the revisor of statutes when federal
263	263	8.32approval is obtained.
264	264	8Sec. 4.
265	265	REVISOR AGW/BM 25-0429203/06/25 9.1 Sec. 5. IMPLEMENTATION OF HOSPITAL ASSESSMENT AND DIRECTED
266	266	9.2PAYMENT PROGRAM.
267	267	9.3 (a) By October 1, 2025, the commissioner of human services must begin all necessary
268	268	9.4claims analysis to calculate the assessment and payments required under Minnesota Statutes,
269	269	9.5section 256.9657, subdivision 2b, and the hospital directed payment program described in
270	270	9.6Minnesota Statutes, section 256B.1974.
271	271	9.7 (b) The commissioner of human services, in consultation with the Minnesota Hospital
272	272	9.8Association, must submit to the Centers for Medicare and Medicaid Services a request for
273	273	9.9federal approval to implement the hospital assessment described in Minnesota Statutes,
274	274	9.10section 256.9657, subdivision 2b, and the hospital directed payment program under
275	275	9.11Minnesota Statutes, section 256B.1974. At least 60 days before submitting the request for
276	276	9.12approval, the commissioner must make available to the public the draft assessment
277	277	9.13requirements, draft directed payment details, and an estimate of each nonexempt hospital's
278	278	9.14assessment amount.
279	279	9.15 (c) During the design and prior to submission of the request for approval under paragraph
280	280	9.16(b), the commissioner of human services must consult with the Minnesota Hospital
281	281	9.17Association and any nonexempt hospitals that are not members of the Minnesota Hospital
282	282	9.18Association.
283	283	9.19 (d) If federal approval is received for the request under paragraph (b), the commissioner
284	284	9.20of human services must provide no less than 30 days for public posting and review of the
285	285	9.21federally approved terms and conditions for the assessment and the directed payment
286	286	9.22program.
287	287	9.23 EFFECTIVE DATE.This section is effective the day following final enactment.
288	288	9Sec. 5.
289	289	REVISOR AGW/BM 25-0429203/06/25