Minnesota hospitals warn of statewide access risk, urge legislature to adopt directed payments and protect 340B

Hospital leaders from across Minnesota told the House Health Finance and Policy Committee on Jan. 22 that hospitals are financially strained and urged lawmakers to adopt a directed payments program to increase Medicaid reimbursements, protect the federal 340B drug discount program and fund workforce and discharge solutions.

The hospitals’ case centered on persistent underpayments from government programs, rising labor and supply costs since 2019, and growing patient “boarding” — patients held in emergency departments or hospital beds because appropriate post-acute or mental-health placements are unavailable. The Minnesota Hospital Association and leaders from Winona Health, Riverview Health (Crookston), Aspirus Lakeview (Two Harbors), Community Memorial (Cloquet) and Rainy Lake Medical Center (International Falls) testified and urged prompt legislative action.

"We are the ultimate safety net, the provider of last resort, and this safety net is fraying," said Rahul Ghoraneh, president and CEO of the Minnesota Hospital Association. He and other witnesses described a statewide pattern of hospitals operating at or below cost, with many losing money in recent years.

Leaders gave local examples to illustrate the statewide problem. Rochelle…