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Providers urge stopgap funding as adult family foster‑care flat rates take effect in 2026
Summary
Adult family foster‑care providers and advocates asked the Senate Human Services Committee to delay flat rate implementation and create a short‑term emergency fund after new tiers passed in 2023 were projected to cut many provider incomes by large margins.
ST. PAUL, Minn. — Dozens of adult family foster care providers and advocates urged the Senate Human Services Committee on Wednesday to provide short‑term funding and more time before a scheduled rate structure change takes effect in January 2026.
Sarah Grafstrom of LeadingAge Minnesota and Alicia Olsen, an adult family foster care provider in Zimmerman, described a projected decline in payments created when flat rate tiers enacted in 2023 replace disability waiver rate system (DWRS) funding. Grafstrom said some providers report reductions "of up to 65%" under the new tiers and said the change will place over 1,100 family residential homes at risk of closure.
Nut graf: Providers told senators the change narrows a previously broader funding system and that a rushed shift could force residents from long‑standing homes into institutional settings. The committee adopted an author's amendment that narrowed the proposal and laid the bill over for possible inclusion in the omnibus process.
What proponents asked for
- A delay of the rate tiers' implementation and a task force to develop alternative payment models.
- A one‑time emergency fund: The author's amendment reduced the scope of the original proposal and created a smaller, temporary funding mechanism. Sponsor Senator Abler said the amendment would create a $1,000,000 per year emergency fund for two years to help adult family foster care (FRS) homes at immediate risk of closure while a longer‑term solution is developed.
Provider testimony
Alicia Olsen, who runs an adult family foster care home, described day‑to‑day costs and the role providers play: "We are the head of the household. So as FRS providers, we are paying for far more than your standard operating cost to maintain that family atmosphere... we are on suicide watch, changing briefs, helping with all ADLs..." The witnesses asked lawmakers to preserve the choice adult clients exercise by selecting family based settings.
Committee action
Senator Abler offered a delete‑all amendment that reduced the fiscal exposure and narrowed the bill’s mechanism; the committee adopted the amendment. The committee laid Senate File 2297 over for possible inclusion in the omnibus bill while asking agencies and stakeholders to continue negotiating longer‑term payment reforms.
Ending: Supporters argued the scheduled transition to flat rates risks widespread closures among small family homes that provide community‑based residential care; sponsors proposed a smaller, targeted emergency fund as a stopgap while broader payment reform is worked out.
