Senate HHS committee unveils omnibus HHS finance bill, moves amendment to expand provider rates and public health funding

The Minnesota Senate Finance Committee on March 25 took up the Health and Human Services omnibus finance and policy bill (Senate File 2669), heard agency testimony, and adopted a large, multi‑section A58 amendment that incorporates technical clarifications, fee changes, program language and appropriations.

Senator Wicklund, chief author of the HHS omnibus, said the bill is designed to protect Minnesotans’ access to health care amid federal funding uncertainty and to strengthen coverage and provider sustainability without relying solely on general fund cuts. “We avoid cuts to basic coverage and continue some essential coverages that are set to expire,” Wicklund said during opening remarks.

Key policy and budget items in the bill as presented include: maintaining audio‑only telehealth coverage that would otherwise expire in summer; a change to formulary rules to limit mid‑year plan changes for drugs; investments to replace or upgrade the Social Services Information System (SSIS) used by child welfare workers; a proposed assessment on health insurers to fund increased reimbursement rates for outpatient mental health and physician services up to Medicare levels; and a provider assessment to support a directed payment program for hospitals. Wicklund said the bill uses assessments on insurers and hospitals to draw down federal matching dollars and to limit the bill’s general fund exposure.

Commissioner Brooke Cunningham of the Minnesota Department of Health told the committee the agency is contending with substantial federal grant cuts — more than $220 million in previously approved federal funding was, she said, suspended on March 25 — and described layoffs and contract terminations at the department. Cunningham welcomed the bill’s investments in infectious disease prevention and fee proposals, but said the state needs new investments to backfill federal cuts.

Senate counsel and bill drafters then summarized the A58 amendment. The amendment contains many components: changes to facility‑fee rules that require provider‑based clinics to bill with distinct national provider identifier numbers and add patient notification language; technical and policy moves for dementia services and newborn screening (adding metachromatic leukodystrophy to the screening panel and raising the testing fee); changes to EMS data reporting and the medication repository program; fee changes for manufactured home parks and recreational camping areas; clarifying changes for ambulance operating deficit grants; a set of behavioral health rate modifications and funding mechanisms tied to an MCO assessment; movement of complex PTSD coverage language into the finance article; a series of Department of Children, Youth and Families (DCYF) recodification and licensing adjustments that were moved from policy to finance where they have a fiscal effect; and extensive appropriations and conforming changes in the appropriations article to match the committee spreadsheet.

Senate counsel also described targeted provider and program changes included in the amendment: increased newborn screening fees tied to adding MLD to the panel; an expansion of Medical Assistance (MA) targeted case management coverage to include PTSD and complex PTSD for certain populations; a directed‑payment structure for hospitals coupled with a surcharge increase designed to be revenue‑neutral for the state treasury; and restoration of the provider tax to 2% (discussed later in hearings and in related health insurance subsidy proposals).

The committee adopted the A58 amendment by voice vote. Members then reviewed a lengthy spreadsheet of change items and line‑by‑line fiscal effects across agencies. Committee staff explained health care access fund balances, TANF balances, and detailed the Senate’s changes to the governor’s proposals as reflected in the spreadsheet. The staff summary included both governor proposals the Senate did not pick up and Senate‑initiated changes (several smaller grants and pilot programs, changes to behavioral health targeted case management and PRTF methodology, and funding proposals for regional food banks, prepared meals, child care improvements and others).

Notable Senate items called out in the spreadsheet walkthrough included proposals to: restore the provider tax to 2% (projected to generate substantial Health Care Access Fund revenue), adopt hospital and pharmacy directed payments funded by assessments on those industries (structured to be neutral for the state treasury), provide funds to replace or improve SSIS for child welfare, and fund infectious disease capacity at MDH in response to federal grant cuts.

Committee members asked technical questions about effective dates, expired uncodified language in the appropriations article, the fiscal mechanics of the provider assessments, and the impacts of proposed rate increases on Medical Assistance and MinnesotaCare. Counsel and agency staff answered and noted the amendment rearranged policy and finance language to reflect cost implications and to conform bill text to the spreadsheet.

The committee recessed for floor session and caucus after completing the amendment and spreadsheet review; further committee action on the bill was expected later in the day.