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HF1975 (Legislative Session 94 (2025-2026))

Hospital payment rates modified.

Related bill: SF2682

AI Generated Summary

This bill proposes amendments to Minnesota Statutes 2024, section 256.969, subdivision 2b, which governs hospital payment rates for inpatient services under Medical Assistance (Medicaid).

Key Changes and Provisions:

  1. Existing Payment Structures for Hospitals Stay in Place:

    • Critical access hospitals will continue to use a cost-based payment methodology.
    • Long-term hospitals will continue to use a per diem payment.
    • Rehabilitation hospitals will continue to follow Medicare’s rehabilitation hospital methodology.
    • All other hospitals will continue to be paid based on the Diagnosis-Related Group (DRG) methodology.

  2. Rebasing of Hospital Payment Rates:

    • Payment rates must be rebased every two years to ensure they reflect changes in hospital costs.
    • If inpatient claims volume is too low to be statistically valid, data from two consecutive years may be used.
    • Years affected by a public health emergency or pandemic must not be used for rebasing.
    • Rebasing must be budget neutral, ensuring total payments remain consistent with prior levels.

  3. New Payment Adjustments for Specific Hospital Services:

    • The commissioner may adjust rates to support pediatric, behavioral health, trauma, transplant, obstetric, and newborn services, particularly in rural areas.
    • Payments made to critical access hospitals will change, with a tiered system promoting efficiency and cost-effectiveness.

  4. Introduction of Medical Education Payment Factor:

    • Hospitals that qualify for medical education and research cost distributions will have an additional payment factor starting January 1, 2024.

  5. Critical Access Hospital Payment Adjustments (Effective July 1, 2025):

    • Payments will be adjusted based on cost tiers, ensuring reimbursements are closer to actual costs.
    • Payment rates will be set to 100% of their base year costs, adjusted for inflation.

  6. Legislative Reporting Requirement:

    • The commissioner must provide an annual report to the legislature, detailing expected payment changes due to rebasing.

Overall Impact:

This bill primarily focuses on ensuring fair and up-to-date hospital payments under Minnesota’s Medicaid program through regular rebasing, cost-based adjustments, and targeted rate modifications for critical services. It also increases transparency by requiring legislative reporting on payment updates.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 05, 2025HouseFloorActionIntroduction and first reading, referred toHealth Finance and Policy
March 05, 2025HouseFloorActionIntroduction and first reading, referred toHealth Finance and Policy

Citations

 
[
  {
    "analysis": {
      "added": [
        "New cost-based methodology for inpatient payment rates for critical access hospitals located in Minnesota."
      ],
      "removed": [
        "Rates shall not be rebased for the period from January 1, 2011, through October 31, 2014, except for specific hospitals."
      ],
      "summary": "This bill modifies hospital payment rates under section 256.969, subdivision 2b.",
      "modified": [
        "Payment methodologies and rebasing periods updated to align more closely with Medicare cost reports."
      ]
    },
    "citation": "256.969",
    "subdivision": "subdivision 2b"
  }
]

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