Behavioral health fund payments for uncollectible withdrawal management debt provided, span of eligibility for behavioral health fund services extended, pilot program established, and other behavioral health provisions modified.

A bill for an act

relating to human services; providing for behavioral health fund payments for

uncollectible withdrawal management debt; extending the span of eligibility for

behavioral health fund services; establishing a pilot program to permit additional

alternative licensing inspections for substance use disorder treatment programs;

authorizing counties to temporarily retain administrative functions related to the

behavioral health fund; modifying adolescent substance use disorder treatment

rate; modifying funding for withdrawal management start-up and capacity-building

grants; requiring reports; amending Minnesota Statutes 2024, sections 254B.03,

by adding a subdivision; 254B.04, subdivision 1; 254B.06, by adding subdivisions;

Minnesota Statutes 2025 Supplement, sections 254B.04, subdivisions 1a, 6;

254B.0509, subdivision 1; Laws 2025, First Special Session chapter 9, article 4,

sections 21; 25; 26; 27; 28; 29; 30.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 254B.03, is amended by adding a subdivision

to read:

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Subd. 2a.

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Behavioral health fund payment for uncollectible withdrawal management

debt.

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(a) The commissioner must develop a procedure and criteria for identifying

uncollectible withdrawal management debt. The criteria for uncollectible withdrawal

management debt must include, at a minimum, the following:

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(1) the services resulting in the withdrawal management debt were provided by an eligible

vendor with whom the commissioner had an agreement under subdivision 9 at the time the

services were provided;

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(2) the client who incurred the withdrawal management debt was not eligible to have

substance use disorder treatment services paid for with behavioral health fund money at the

time the services were provided;

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(3) the provider has billed any available third-party payment source, the claim has been

denied, and the provider has confirmed that any remaining balance is the client's

responsibility; and

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(4) the provider has billed the client for the client's remaining balance for the cost of

treatment, including co-payments, coinsurance, and deductibles; has made reasonable efforts

seeking payment of the remaining balance; and the remaining balance is at least 90 days

past due.

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Nothing in this paragraph relieves a withdrawal management program from the program's

obligations under section 62J.808.

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(b) The criteria under paragraph (a) must not include:

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(1) a requirement that a withdrawal management program attempt to enroll the client in

a payment plan for the client's remaining balance; or

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(2) a requirement that a withdrawal management program refer the withdrawal

management debt to a collection agency or law firm for collection.

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(c) Notwithstanding subdivision 2, beginning with services provided on or after July 1,

2027, the commissioner shall pay withdrawal management programs from the behavioral

health fund for uncollectible withdrawal management debt in an amount not to exceed the

rate as determined under this chapter for the services provided.

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EFFECTIVE DATE.

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This section is effective July 1, 2026.

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Sec. 2.

Minnesota Statutes 2024, section 254B.04, subdivision 1, is amended to read:

Subdivision 1.

Scope and applicability.

This section governs the administration of the

behavioral health fund, establishes the criteria to be applied by
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local agencies
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the

commissioner or Tribal Nation
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to determine a client's financial eligibility under the behavioral

health fund, and determines a client's obligation to pay for substance use disorder treatment

services.

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EFFECTIVE DATE.

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This section is effective July 1, 2027.

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Sec. 3.

Minnesota Statutes 2025 Supplement, section 254B.04, subdivision 1a, is amended

to read:

Subd. 1a.

Client eligibility.

(a) Persons eligible for benefits under Code of Federal

Regulations, title 25, part 20, who meet the income standards of section
256B.056,

subdivision 4
, and are not enrolled in medical assistance, are entitled to behavioral health

fund services. State money appropriated for this paragraph must be placed in a separate

account established for this purpose.

(b) Persons with dependent children who are determined to be in need of substance use

disorder treatment pursuant to an assessment under section
260E.20, subdivision 1
, or in

need of chemical dependency treatment pursuant to a case plan under section
260C.201,

subdivision 6
, or
260C.212
, shall be assisted by the commissioner to access needed treatment

services. Treatment services must be appropriate for the individual or family, which may

include long-term care treatment or treatment in a facility that allows the dependent children

to stay in the treatment facility. The county shall pay for out-of-home placement costs, if

applicable.

(c) Notwithstanding paragraph (a), any person enrolled in medical assistance or

MinnesotaCare is eligible for room and board services under section
254B.0505, subdivision

1
, clause (9).

(d) A client is eligible to have substance use disorder treatment paid for with funds from

the behavioral health fund when the client:

(1) is eligible for MFIP as determined under chapter 142G;

(2) is eligible for medical assistance as determined under Minnesota Rules, parts

9505.0010
to
9505.0140
;

(3) is eligible for general assistance, general assistance medical care, or work readiness

as determined under Minnesota Rules, parts
9500.1200
to
9500.1272
; or

(4) has income that is within current household size and income guidelines for entitled

persons, as defined in this subdivision and subdivision 7.

(e) Clients who meet the financial eligibility requirement in paragraph (a) and who have

a third-party payment source are eligible for the behavioral health fund if the third-party

payment source pays less than 100 percent of the cost of treatment services for eligible

clients.

(f) A client is ineligible to have substance use disorder treatment services paid for with

behavioral health fund money if the client:

(1) has an income that exceeds current household size and income guidelines for entitled

persons as defined in this subdivision and subdivision 7; or

(2) has an available third-party payment source that will pay the total cost of the client's

treatment.

(g) A client who is disenrolled from a state prepaid health plan during a treatment episode

is eligible for continued treatment service that is paid for by the behavioral health fund until

the treatment episode is completed or the client is re-enrolled in a state prepaid health plan

if the client:

(1) continues to be enrolled in MinnesotaCare, medical assistance, or general assistance

medical care; or

(2) is eligible according to paragraphs (a) and (b) and is determined eligible by the

commissioner under section
254B.04
.

(h) When a county commits a client under chapter 253B to a regional treatment center

for substance use disorder services and the client is ineligible for the behavioral health fund,

the county is responsible for the payment to the regional treatment center according to

section
254B.0501, subdivision 3
.

(i) Persons enrolled in MinnesotaCare are eligible for room and board services when

provided through intensive residential treatment services and residential crisis services under

section
256B.0632
.

(j) A person is eligible for one
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60-consecutive-calendar-day
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180-consecutive-calendar-day
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period per year. A person may submit a request for additional eligibility to the commissioner.

A person denied additional eligibility under this paragraph may request a state agency

hearing under section
256.045
.

Sec. 4.

Minnesota Statutes 2025 Supplement, section 254B.04, subdivision 6, is amended

to read:

Subd. 6.

Commissioner to determine client financial eligibility.

(a) The commissioner

shall determine a client's financial eligibility for the behavioral health fund according to

section
254B.04, subdivision 1a
, with the income calculated prospectively for one year from

the date of request. The commissioner shall pay for eligible clients according to chapter

256G. Client eligibility must be determined using only forms prescribed by the commissioner.

To determine a client's eligibility, the commissioner must determine the client's income,

the size of the client's household, the availability of a third-party payment source, and a

responsible relative's ability to pay for the client's substance use disorder treatment.

(b) A client who is a minor child must not be deemed to have income available to pay

for substance use disorder treatment, unless the minor child is responsible for payment under

section
144.347
for substance use disorder treatment services sought under section
144.343,

subdivision 1
.

(c) The commissioner must determine the client's household size as follows:

(1) if the client is a minor child, the household size includes the following persons living

in the same dwelling unit:

(i) the client;

(ii) the client's birth or adoptive parents; and

(iii) the client's siblings who are minors; and

(2) if the client is an adult, the household size includes the following persons living in

the same dwelling unit:

(i) the client;

(ii) the client's spouse;

(iii) the client's minor children; and

(iv) the client's spouse's minor children.

For purposes of this paragraph, household size includes a person listed in clauses (1) and

(2) who is in an out-of-home placement if a person listed in clause (1) or (2) is contributing

to the cost of care of the person in out-of-home placement.

(d) The commissioner must determine the client's current prepaid health plan enrollment,

the availability of a third-party payment source, including the availability of total payment,

partial payment, and amount of co-payment.

(e) The commissioner shall require the client and policyholder to conditionally assign

to the department the client and policyholder's rights and the rights of minor children to

benefits or services provided to the client if the department is required to collect from a

third-party pay source.

(f) The commissioner must determine a client's eligibility for the behavioral health fund

for a
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60-consecutive-calendar-day
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180-consecutive-calendar-day
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period per calendar year.

(g) A client, responsible relative, and policyholder must provide income or wage

verification, household size verification, and must make an assignment of third-party payment

rights under paragraph (e). If a client, responsible relative, or policyholder does not comply

with the provisions of this subdivision, the client is ineligible for behavioral health fund

payment for substance use disorder treatment, and the client and responsible relative must

be obligated to pay for the full cost of substance use disorder treatment services provided

to the client.

Sec. 5.

Minnesota Statutes 2025 Supplement, section 254B.0509, subdivision 1, is amended

to read:

Subdivision 1.

Base payment rates.

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(a)
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Effective for services provided on or after

January 1, 2026, the commissioner must implement the following base payment rates for

substance use disorder treatment services under section 254B.0505, subdivision 1:

(1) for low-intensity residential services, 100 percent of the modeled rate included in

the final report required by Laws 2021, First Special Session chapter 7, article 17, section

18;

(2) for high-intensity residential services, 83 percent of the modeled rate included in the

final report required by Laws 2021, First Special Session chapter 7, article 17, section 18;

and

(3) for treatment coordination services, 100 percent of the modeled rate included in the

final report required by Laws 2021, First Special Session chapter 7, article 17, section 18.

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(b) Effective for services provided on or after January 1, 2027, the base payment rate

for high-intensity residential services provided by adolescent treatment programs under

section 254B.0505, subdivision 1, clause (9), is equal to 130 percent of the base payment

rate for high-intensity residential services under paragraph (a), including any adjustments

under subdivision 2.

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EFFECTIVE DATE.

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This section is effective January 1, 2027, or upon federal approval,

whichever is later.

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Sec. 6.

Minnesota Statutes 2024, section 254B.06, is amended by adding a subdivision to

read:

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Subd. 1a.

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State collections for withdrawal management services.

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Subdivision 1 applies

to all collections from clients determined by the commissioner to have uncollectible

withdrawal management debt under section 254B.03, subdivision 2a.

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EFFECTIVE DATE.

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This section is effective July 1, 2026, and applies to all withdrawal

management services provided on or after that date.

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Sec. 7.

Minnesota Statutes 2024, section 254B.06, is amended by adding a subdivision to

read:

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Subd. 3a.

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Payment for withdrawal management services.

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Notwithstanding subdivision

3, the commissioner shall pay eligible vendors for withdrawal management services that

the commissioner determines are uncollectible withdrawal management debt under section

254B.03, subdivision 2a.

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EFFECTIVE DATE.

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This section is effective July 1, 2026, and applies to all withdrawal

management services provided on or after that date.

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Sec. 8.

Laws 2025, First Special Session chapter 9, article 4, section 21, the effective date,

is amended to read:

EFFECTIVE DATE.

This section is effective July 1,
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2026
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2027
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.

Sec. 9.

Laws 2025, First Special Session chapter 9, article 4, section 25, the effective date,

is amended to read:

EFFECTIVE DATE.

This section is effective July 1,
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2026
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2027
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.

Sec. 10.

Laws 2025, First Special Session chapter 9, article 4, section 26, the effective

date, is amended to read:

EFFECTIVE DATE.

This section is effective July 1,
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2026
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2027
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.

Sec. 11.

Laws 2025, First Special Session chapter 9, article 4, section 27, the effective

date, is amended to read:

EFFECTIVE DATE.

Paragraph (d) is effective July 1, 2025. Paragraphs (b), (g), and

(j) are effective July 1,
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2026
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2027
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.

Sec. 12.

Laws 2025, First Special Session chapter 9, article 4, section 28, the effective

date, is amended to read:

EFFECTIVE DATE.

This section is effective July 1,
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2026
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2027
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.

Sec. 13.

Laws 2025, First Special Session chapter 9, article 4, section 29, the effective

date, is amended to read:

EFFECTIVE DATE.

This section is effective July 1,
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2026
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2027, except the amendment

to paragraph (f) modifying the eligibility period is effective July 1, 2026
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.

Sec. 14.

Laws 2025, First Special Session chapter 9, article 4, section 30, the effective

date, is amended to read:

EFFECTIVE DATE.

This section is effective July 1,
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2026
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2027
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.

Sec. 15.
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QUALIFYING ACCREDITATION PILOT PROGRAM FOR SUBSTANCE

USE DISORDER TREATMENT PROGRAMS.
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(a) By July 1, 2027, the commissioner of human services must develop a pilot program

that expands the definition of "accrediting body" under Minnesota Statutes, section 245G.031,

subdivision 2, paragraph (c), to include either the Commission on Accreditation of

Rehabilitation Facilities or the ASAM Level of Care Certification Program. The

commissioner must collaborate with interested parties, including but not limited to the

Minnesota Association of Resources for Recovery and Chemical Health, in developing the

pilot program in a manner consistent with Minnesota Statutes, section 245G.031.

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(b) By January 1, 2030, based on the assessment of the pilot program by the commissioner

of human services, the commissioner must submit recommendations to the legislature

regarding expanding the definition of "accrediting body" under Minnesota Statutes, section

245G.031, subdivision 2, paragraph (c), to include the Commission on Accreditation of

Rehabilitation Facilities, the ASAM Level of Care Certification Program, both, or neither.

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EFFECTIVE DATE.

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This section is effective July 1, 2026.

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Sec. 16.
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DIRECTION TO THE COMMISSIONER OF HUMAN SERVICES;

ADOLESCENT SUBSTANCE USE DISORDER TREATMENT.
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By January 15, 2027, the commissioner of human services shall submit to the chairs and

ranking minority members of the legislative committees with jurisdiction over substance

use disorder treatment an update to the report required under Laws 2021, First Special

Session chapter 7, article 17, section 18. The update to the report must contain

recommendations for benchmark payment rates for residential and nonresidential substance

use disorder treatment provided to adolescents.

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Sec. 17.
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APPROPRIATION; GENERAL FUND BASE REDUCTION.
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The general fund appropriation for withdrawal management start-up and capacity-building

grants under Minnesota Statutes, section 254B.17, in Laws 2025, First Special Session

chapter 9, article 12, section 21, and originally appropriated under Laws 2023, chapter 61,

article 9, section 2, subdivision 18, paragraph (g), is reduced in fiscal year 2027 by $.......

and the base is reduced in fiscal year 2028 and each year thereafter by $........ The

commissioner of human services must terminate or amend existing grant contracts to achieve

the necessary reduction in grant expenditures based on the reduction to the program under

this section.

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EFFECTIVE DATE.

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This section is effective July 1, 2026.

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