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Nursing home providers say proposed caps, unfunded mandates would deepen staffing crisis
Summary
Representatives of Minnesota nursing homes and long-term care providers told the Human Services Committee that the governor's proposed 2% cap on operating rates and unfunded Workforce Standards Board mandates would create large funding gaps and risk closures, particularly in rural areas.
Nursing home and long-term care providers told the Minnesota Senate Human Services Committee that the governor’s budget proposal — which limits future operating rate growth and does not fully fund Workforce Standards Board mandates — would deepen workforce shortages and threaten facility closures.
Why it matters: Providers said the state’s value-based reimbursement (VBR) model improved wages and benefits over the past decade, and they argued that the proposed changes would reverse gains and create a multi-hundred-million-dollar gap in facility finances.
Provider testimony cited several concrete impacts. Kyle Burn of the Long Term Care Imperative said the administration’s plan “places a 2% cap on all future rate increases” and that the proposal results in a larger net reduction when federal matching funds and private-pay equalization are considered. The Long Term Care Imperative and other witnesses estimated the cumulative impact on nursing homes could reach hundreds of millions, with figures of $700 million and larger totals discussed during testimony.
Several providers also flagged the Nursing Home Workforce Standards Board’s rules as an unfunded mandate. John Lynn of Acumen Saint Benedict said the board’s measures — holiday pay requirements and minimum-wage increases phased in 2026–27 — were set without full legislative funding and “place a significant financial burden on nursing homes.” Annalise Peterson, chief operating officer for Benedictine, said her organization invested $6.5 million for wages, food and activities in a recent 12-month period and would face a projected $3.9 million shortfall under the governor’s approach.
Rural access was a recurrent theme. Testimony from nursing home executives and organizations argued that bed closures already occurring in Greater Minnesota would accelerate if the budget reduces reimbursement and fails to cover workforce standards costs. Erin Hubert of the Long Term Care Imperative warned that the operating rate funds “the food that residents eat, ... the wages of the nursing staff, the housekeeping staff, and the dietary aids.”
Ending: Providers urged lawmakers to reject cuts and fully fund workforce and operating needs. Committee members acknowledged the testimony and said they will continue analyzing rate-model effects, mandate funding, and rural access concerns as budget negotiations continue.
