[{"_1":2,"_88":-5,"_89":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6340512,"mediaKeyId","2259295-a7a0962f5b7a013f0710f81fa01efc80","parentId",2259295,"title","DHS presents $575 million savings package: telehealth extension, pharmacy carve‑out and HMO surcharge increase","audioSeconds",2785,"startMs",3511000,"endMs",6296000,"viewUrl","/Search/View?dp=1&key=2259295-a7a0962f5b7a013f0710f81fa01efc80&start=3511&end=6296","thumbnailUrl","https://assets.pipeline.soar.com/2259295-a7a0962f5b7a013f0710f81fa01efc80/thumbnail_3511000.jpg","articleUrl","/articles/6340512/Minnesota/DHS-presents-575-million-savings-package-telehealth-extension-pharmacy-carveout-and-HMO-surcharge-increase","mediaUrl","https://secure.pipeline.soar.com/6340512-9bd8f0f6618ac4130dd2acdb3f0c6449/orig.mp4?Expires=1773265327&Signature=cVldS6p-eHjqZvI~Mp4CzM4Th8aHlcnkEiWsQsnRaKD3lQW~C2glMeWvKjwMPZMPlXsG0WwKfW993PY1hFNAMRPJGPMfDRirlnD1MifbgmocpAnpt~rGWyRhQQ1le~vKJsbK8PDYj7gCO5Zii3WOCwjPh43DrP7EdZIKSpDMb2MwtCJeI7Wpfa9XxYhh7hSdiS4BIJyff2v0gzWlQAh9lcBfjYX6g6YGPE98t9Bz-JDCZxJ-0~-HAf7NAouvDwWXw0B4z3LPAASeplimeyhsV0uZClxk4TUTjwHT0LBMKzFa82lemZZ~tVcBC37Xi-QzAu9ozmLb7LL69QOdGVepgg__&Key-Pair-Id=KUT5TJCACFTXG","author","Minnesota House of Representatives","date","2025-02-10T00:00:00Z","article","Interim Commissioner Shereen Gandhi and DHS Budget Director Elise Bailey outlined the Department of Human Services’ budget proposals to the House Health and Finance Policy Committee on Feb. 10, describing roughly $575 million in projected savings over four years and multiple operational and program changes.

\"At DHS, our mission is that in collaboration with community and partners, we support people to thrive in community and live their healthiest, fullest lives,\" Gandhi told the committee as she framed the department's role and the scale of programs under its jurisdiction.

DHS overview and scale

Elise Bailey told lawmakers DHS’s FY26 budget is about $24 billion in all funds, with roughly 54% from federal sources and about $9.4 billion from the state general fund. The department said it directly impacts more than a quarter of Minnesotans in its programs; in FY24 DHS served about 1.3 million Medicaid enrollees and 42% of Minnesota children receive health coverage through public programs.

Major proposals presented

- Pharmacy carve‑out: DHS proposes carving prescription drugs out of managed care for Medical Assistance (Medicaid), moving them to fee‑for‑service so the state can access Medicaid prescription-drug rebate revenue and realize savings (DHS estimated roughly 30% savings on drugs affected by 340B interactions). DHS said the savings result from accessing federal rebate programs and reducing managed‑care administrative costs.

- Extend audio‑only telehealth access: the governor proposes extending authorization for audio‑only telehealth services in Minnesota Health Care Programs through July 1, 2027. DHS said the 2024 study by MDH and DHS found continued benefit for populations with transportation or technology barriers, particularly in Greater Minnesota.

- Increase HMO surcharge: the governor proposes increasing the HMO surcharge from 0.6% to 1.25% of premium revenue with a corresponding adjustment in the Healthcare Access Fund appropriation for Medical Assistance (a $25 million shift to the Healthcare Access Fund was noted in testimony).

- Non‑emergency medical transportation (NEMT): DHS proposed administering NEMT through a single statewide administrator to improve oversight, negotiate rates and gain efficiencies; DHS estimates vendor administration costs in the proposal and expects improved uniformity of access.

- Eliminate optional chiropractic benefit: the governor’s package includes removing the chiropractic benefit from Medical Assistance as a discretionary savings item; DHS described it as an optional service under federal rules (not required to meet federal Medicaid conditions).

- Extend the drug formulary committee and preserve supplemental rebate access: DHS proposed preventing the sunset of the drug formulary committee (through June 30, 2027) so the state continues to gain supplemental rebates through the preferred drug list process.

- Technical clarifications: statutory clarifications for federally qualified health center (FQHC) rate methodology upon mergers and ownership changes.

Savings and impacts

Bailey and Assistant Commissioner Conley presented estimates showing approximately $575 million in four‑year savings across several proposals with the pharmacy carve‑out and NEMT restructuring identified as significant drivers. DHS emphasized the federal match component—about 54% of DHS funding comes from federal sources—and warned that federal-level changes remain the largest uncertainty for long-range forecasting.

Committee feedback and concerns

Members asked for additional data and raised concerns about access and implementation. Representative Keeler and other Greater Minnesota lawmakers asked DHS to disaggregate telehealth use to show where audio‑only services fill provider gaps versus substituting for available in‑person care. Several members urged caution on a single NEMT administrator, citing past problems with brokered NEMT models and the logistical complexity of transporting people with medical needs.

Representative Franson and other members pressed DHS on fraud prevention and the department’s use of resources to detect improper payments; DHS pointed to its Office of Inspector General and ongoing efforts but offered to follow up with more detailed materials.

Questions were raised about the proposed elimination of chiropractic coverage and what optional services could be targeted instead; DHS staff said chiropractic is optional under federal Medicaid rules and offered to provide a list of other optional benefits.

No formal votes were taken at the hearing. DHS staff offered to provide additional data on enrollment trends after the Medicaid unwinding, regional telehealth usage, and clarifications on vendor and operational assumptions.

Ending note

Gandhi and DHS budget staff closed by inviting continued work with the committee to refine assumptions and provide requested data. Bailey said DHS has formed internal teams to monitor federal developments that could affect the department's funding and would update lawmakers as changes occur.","mediaType","Video","parentTitle","House Health Finance and Policy Committee 2/10/25","oneSentenceSummary","Interim Commissioner Shereen Gandhi and DHS Budget Director Elise Bailey outlined the Department of Human Services’ budget proposals to the House Health and Finance Policy Committee on Feb. 10, describing roughly $575 million in projected savings over four years and multiple operational and program changes.","taxTitle","2025 Legislature MN, Minnesota","taxId",77817,"location","Minnesota","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6340516,"MDH asks Legislature to backfill federal cuts, raise fees for water, licensure and inspections",1412,351000,1763000,"/Search/View?dp=1&key=2259295-a7a0962f5b7a013f0710f81fa01efc80&start=351&end=1763","https://assets.pipeline.soar.com/2259295-a7a0962f5b7a013f0710f81fa01efc80/thumbnail_351000.jpg","/articles/6340516/Minnesota/MDH-asks-Legislature-to-backfill-federal-cuts-raise-fees-for-water-licensure-and-inspections","https://secure.pipeline.soar.com/6340516-3109a6f009cc55f44327e5f2359d5656/orig.mp4?Expires=1773265327&Signature=RMTt~FeQg9LpyyzI0M7G4ksgITApQZOCNQWjxpMXDwYie5I1B~pPp2ApVGvtf-6RKShhom8hK40D-1U9IWiINz1gbNYIv8LIOrKtrdC7xOlxmlbE-UBnfiDxZn5T6BVRkUcd2zX~qIJVrEyezAdO1pM9S20IfQZNbxOvgWHgFKSWV7OZkK8cbt89kZNSWQoLH~j49Y1vTM2li3R7mkQbSO~qeA-lwmtIq6YR9VOH8j4Wg8GWCiHenNBco~T7gfkaqosLSiFeVvQZX-~oODZo9khAcSlAiNDqYRcUx-picrP0zD2~rheIyP3JJGPTuL2U1DJTbVCDDV395baFBIUZAw__&Key-Pair-Id=KUT5TJCACFTXG","Commissioner Brooke Cunningham, of the Minnesota Department of Health, told the House Health and Finance Policy Committee on Feb. 10 that MDH needs state support to absorb expected federal funding reductions and to maintain core public-health services.

\"At MDH our mission is to protect, maintain and improve the health of all communities,\" Cunningham said, summarizing the department's role in everything from infectious-disease response to drinking-water protection, newborn screening and WIC services.

Cunningham framed the request as a response to shrinking federal support and rising operating costs. She told the committee that local public-health departments across Minnesota spend about $400 million collectively while the state's health-care spending approaches $67 billion, and that the number of local public-health full-time equivalent staff per 100,000 people has fallen roughly 22% over the last 20 years.

The department's budget package includes two main General Fund cost proposals plus several fee increases and budget-neutral changes. The largest General Fund ask is to sustain infectious-disease prevention and response capacity as COVID-era federal funding declines. Cunningham noted continuing threats such as bird flu, Ebola-related events noted by federal partners, and rising tick- and mosquito-borne illness, and she said an aging population and more people living in congregate care increase vulnerability.

Key proposals and details

- Infectious-disease prevention and response: state funding to replace federal COVID-era investments that supported outbreak detection, testing and response teams.

- Public water and well programs: a proposed increase in public-water-supply fees to offset an MDH projection of a $60–$70 million reduction in EPA funding over three years. MDH noted that about 80% of Minnesotans rely on public water systems and roughly one-fifth rely on private wells.

- Assisted-living licensure and facility regulation: fee increases to support licensing, inspections and certification work for assisted-living and other regulated health facilities; MDH says the number of assisted-living providers rose about 25% since the last fee adjustments in some categories and that fees in many licensing buckets have not been updated for years (examples given: engineering plan review fees not updated since 2013; HMO fees not updated since 1999).

- Food, pools and lodging: a proposed licensing fee increase MDH estimates will raise roughly $5.4 million annually. MDH said the revenue will primarily fund additional inspection capacity, credentialing and data-system upgrades and that without it mandated inspection frequencies and plan-review timeliness would slip.

- Radioactive materials and X-ray regulation: fee increases for radioactive-material licenses (MDH enforces NRC agreements) and a proposed statutory change to move X-ray inspections from a fixed four‑year interval to a risk‑based interval; X‑ray fees were last adjusted in 2009.

- Asbestos statute change: MDH requested amending Minnesota Statutes §326.72 to remove the word \"intending,\" which the department said limits enforcement when permit thresholds are circumvented.

- Operations adjustment: a modest General Fund request (Cunningham described $2.4 million in operations adjustments in committee questioning) to cover higher personnel compensation and nonpersonnel operating costs such as IT, rent, utilities and legal services.

Budget‑neutral proposals

Cunningham also described several budget‑neutral or reauthorization requests: continuing and removing the sunset on the Early Hearing Detection and Intervention advisory committee; changing the maternal and child health advisory task force into an advisory committee (so it would not sunset and could reimburse members); restoring part of last-session reductions to local cannabis and substance-misuse prevention grants by shifting funds within the substance-use appropriation; authorizing direct access for tribal governments to American Indian Health special-emphasis grants (no competition); reauthorizing the State Trauma Advisory Council; and extending the PFAS biomonitoring project for firefighter health research to complete its work.

Committee questions and concerns

Committee members pressed for more detail about how specific fee increases would be used. Representative Danny Nadeau and Representative Nadal (transcript identification) asked for explicit breakdowns of the $5.4 million food/pool/lodging revenue and how much would go to staffing, credentials and the hospitality fee. Cunningham said about 70% of the aggregated hospitality/ licensing revenue increase would be fee revenue, with roughly 25% coming from an increased hospitality fee; she offered follow-up from environmental-health division staff for detailed accounting.

Representatives also asked about assisted-living enforcement and whether pandemic-era enforcement actions used the same rules as today; Cunningham said MDH would follow up with the health regulation team to provide specifics to the committee. On well-management and county fees, Tom Hogan, MDH Environmental Health Division director, told the committee that well fees are paid through the property-transfer mechanism, and MDH is discussing automation with county recorders to reduce county burden.

Why this matters

Cunningham said investment in public health yields high returns: MDH cited a median $14.30 return for every $1 invested in public-health interventions and presented examples (a $35 million prevention effort on physical activity and smoking produced an estimated $365 million in avoided obesity-related spending). The department argued that without state action to replace federal reductions and update long‑outdated fees, inspection timeliness, regulatory capacity and data systems will degrade.

What did not change today

No formal committee votes were taken at the hearing. Cunningham emphasized MDH seeks continued partnership with the Legislature and invited follow-up from members and subject-matter staff.

Ending note

Cunningham closed by introducing staff in the room who would follow up with committee questions, including Autumn Baum (assistant legislative director) and Bridal White (finance).\"We want to be your partners in protecting, maintaining and improving the health of all Minnesotans,\" she told lawmakers.","At a Feb. 10 House Health and Finance Policy hearing, Minnesota Department of Health Commissioner Brooke Cunningham urged state funding to replace waning federal COVID-era support and asked for multiple fee increases to maintain inspections, drinking-water protection and regulation of assisted-living and health facilities.","actionData","errors"]

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DHS presents $575 million savings package: telehealth extension, pharmacy carve‑out and HMO surcharge increase

MDH asks Legislature to backfill federal cuts, raise fees for water, licensure and inspections