Minnesota committee hears DHS outpatient rate study; sponsors lay over bill to raise Medicaid behavioral‑health and physician rates

The House Human Services Finance and Policy Committee on March 3 heard a Department of Human Services presentation on an outpatient Medicaid rate study and took initial action on House File 1005, a bill that would phase in higher reimbursement for physician and community behavioral‑health services.

The study and the bill aim to address what DHS presenters called long‑standing, “static” reimbursement methodologies that have left many Medicaid providers paid well below Medicare levels and contributed to access problems for children and adults seeking outpatient mental‑health and substance‑use disorder care.

The DHS presentation: goals, methodology and headline findings

“One is to pay, or adopt the Medicare rates — 100% of what the Medicare rates are,” said Geogo Hace, division director with the Minnesota Department of Human Services, summarizing one of three core RBRVS recommendations in the department’s report. Hace told the committee the department contracted with a vendor and convened provider workgroups, surveys and more than 30 meetings to develop the recommendations.

The study examined two broad buckets of rates: those paid under a resource‑based relative value scale (RBRVS) used for about 8,000–9,000 procedure codes and a second set of roughly 130 non‑RBRVS Medicaid rates (mostly community behavioral‑health and substance‑use services) for which Medicare has no direct analog. DHS presenters said Minnesota’s RBRVS‑paid codes were, in the aggregate, paid at about 74% of Medicare in the 2023 data the study used. The department recommended (1) moving…