Three nonprofit nursing homes seek relief after rate-change timing left them under older reimbursement system

House Human Services Finance and Policy Committee members heard testimony on House File 702 on March 10, 2025, a bill sponsored by Representative Davids seeking to extend or correct reimbursement eligibility for three nonprofit nursing homes whose capital projects began before a Jan. 1, 2020 change to Minnesota’s nursing-home moratorium exception rate process.

The bill’s sponsor, Representative Davids, said the three facilities — Viewcrest Health Center in Duluth, Ling Bloomston in St. Paul, and Chosen Valley Senior Living in Chatfield — started capital projects in 2018 and 2019 that were completed after the Jan. 1, 2020 change and therefore were placed on the older, lower rate schedule. "Our 3 care centers started our projects prior to January 1 of 2020," testifier Chester Fischel, administrator at Viewcrest, told the committee. "Due to this, we were put under the old rate system for this process and it's significantly less financially feasible."

The nut graf: Committee members were presented with a narrow fix for facilities the testimony said were caught by timing — not by other eligibility factors — and asked the panel to consider whether those sites should qualify for the higher post‑2020 rate. The chair laid House File 702 over for possible inclusion in an omnibus bill.

Testimony and explanation

Chester Fischel, administrator at Viewcrest Health Center, told the committee the three facilities are nonprofit nursing homes that use the moratorium-exception process to obtain approval and rate changes that fund capital improvements. He described that the facilities began projects before the Jan. 1, 2020 change but completed them afterward, and therefore were treated under the older rate formula. "So last year legislation was passed to make a correction to that, which then it sunsets or it expires May 30, 2026," Fischel said, adding that the costs associated with the projects do not end with that sunset date.

A nonpartisan staff member identified as Mr. Berg summarized the moratorium-exception mechanism as a process in which the Legislature appropriates funding and the Department of Health (DHS) administers awards that result in rate changes for facilities that complete approved capital projects. Berg said the three homes at issue "are being left in their old rate rather than moving to an updated rate."

Committee action and next steps

The committee did not take a recorded roll-call vote on the bill during the hearing. The chair moved and then stated he would lay House File 702 over for possible inclusion in an omnibus bill. No formal amendment or specific dollar figures were provided at the hearing; members asked clarifying questions about the rate and grant process.

Why it matters

The moratorium-exception rate process affects how providers recover capital costs through rate adjustments; facilities that miss the eligibility window can face materially lower reimbursements. Testimony framed House File 702 as a narrowly tailored remedy for three nonprofit providers that advocacy and the bill authors contend were disadvantaged by the timing of the 2020 statutory change.

Details from the hearing

- Projects at the three facilities began in 2018 and 2019 and were completed after Jan. 1, 2020, the date of the statutory change cited at the hearing. - Testimony characterized the three homes as nonprofit and as having used a competitive moratorium-exception process for approval prior to project start. - The committee was asked to consider a correction that had been enacted previously but which includes a May 30, 2026 sunset.

Meeting disposition

Chair: laid House File 702 over for possible inclusion in an upcoming omnibus bill.