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Senate file 2413 would authorize hospital assessment to draw down federal Medicaid dollars, sponsors say
Summary
Senate file 2413 would create a hospital assessment program that returns federal Medicaid matching funds to Minnesota hospitals through directed payments. Sponsors said the change could stabilize hospital finances and preserve services; the committee passed the bill and referred it to Taxes.
Senate file 2413, sponsored by Senator Mann, would authorize a hospital assessment program that uses state assessments on hospitals to draw down additional federal Medicaid matching funds and return them to hospitals through directed Medicaid payments.
Why proponents support it: Hospital leaders told the committee that operating margins remain strained since the pandemic and that service lines — including labor and delivery, pediatrics and behavioral health — have been closed or reduced in multiple communities. Rick Brewer (CEO, Community Memorial Hospital, Cloquet) described local financial deterioration and said rural hospitals run integrated community services (EMS, hospice, nursing home, clinics) that are at risk when hospital margins worsen. Trevor Zawalish (North Memorial Health) said the system serves large volumes of Medicaid and Medicare patients and faces losses that threaten service continuity.
Mechanics and federal match: Testimony described the assessment as an upfront hospital payment that draws federal Medicaid funds at the applicable FMAP rate; those federal dollars would be redistributed as directed payments to stabilize Medicaid hospital funding. Sponsor modeling presented in committee materials estimates the program could draw down roughly $1 billion in additional federal funds in aggregate; committee members asked staff for clarifying details. The Minnesota Council of Health Plans supported the concept but requested timeline and administrative changes (for example, aligning MCO payment timelines to industry standard 30 days rather than shorter periods in the bill).
Committee action: The committee adopted an author's amendment earlier in the hearing and voted to pass Senate file 2413; the bill was referred to the Committee on Taxes.
