Hospital assessment requirement provision and hospitals in the medical assistance program directed payments requirement provision
SF2413 establishes a new hospital assessment and hospital directed payment framework for Minnesota’s Medical Assistance program. The bill requires eligible hospitals to pay quarterly assessments based on inpatient and outpatient revenue, with the assessment amount designed to fund the nonfederal share of a new directed payment program. The commissioner of human services would calculate, invoice, collect, and adjust these assessments, and the bill includes provisions for mergers, closures, disputes, exemptions, and reductions to keep the total assessment within the amount needed for the program.
The bill also creates a hospital directed payment program under which managed care health plans would pass through quarterly directed payments to hospitals. The commissioner would set payment amounts using commercial rate benchmarks or another CMS-approved method, ensure payments do not exceed federal limits, and require public reporting, annual notices, and validation of claims data. A new special revenue account would hold the assessment revenue and be appropriated to support the program, and the commissioner would have to report annually to the legislature on the account’s use and the program’s outcomes.
The bill would amend Minnesota Statutes sections 256.9657 and 256B.1973 and create new sections 256B.1974 and 256B.1975, adding a hospital assessment and a state-directed payment structure tied to Medical Assistance managed care. It would affect hospitals participating in Medical Assistance, managed care health plans under contract with the state, and the Department of Human Services, while also carving out exemptions or discounts for certain hospital types such as critical access hospitals, children’s hospitals, Indian Health Service facilities, and state-operated facilities. The program is contingent on federal approval and CMS authorization, and the bill would not take effect until the later of January 1, 2026, or federal approval of the relevant provisions.
The bill appears generally supportive of hospitals and the Medical Assistance financing structure, in that it is designed to bring additional directed payments to hospitals while preserving federal compliance. The text emphasizes consultation with the Minnesota Hospital Association, public posting of draft terms, and annual reporting, suggesting an effort to build transparency and stakeholder buy-in. No committee transcript or vote record was provided, so there is no direct evidence of recorded support or opposition beyond the bill’s structure and safeguards.
The main points of contention are likely to be the mandatory hospital assessment, how the assessment is allocated across hospitals, and whether the directed payment methodology is acceptable to federal regulators. Hospitals may object to the assessment burden, especially if they are not fully offset by directed payments, while the bill tries to address fairness through exemptions, caps on any single hospital system’s share, and uniform reductions if needed. Managed care plans and hospitals may also dispute payment calculations, claims validation, and restrictions on passing assessment costs through to patients or negotiating rates based on the directed payments. Because the program depends on CMS approval, federal compliance is another likely source of concern.