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A bill for an act
relating to health; establishing a hospital stabilization program; establishing a
community-based safety net provider stabilization program; establishing a Hennepin
Healthcare System, Inc., stabilization grant program; requiring reports;
appropriating money; amending Minnesota Statutes 2024, section 16A.103, by
adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter
144.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, section 16A.103, is amended by adding a subdivision
to read:
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Subd. 1k.
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Report on financial stability of hospitals.
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The commissioner of management
and budget, in consultation with the commissioner of health, must submit with each
November forecast under this section a report on the financial stability of Minnesota's
hospitals. The report must consider the core financial metrics of hospitals, expenses and
staffing data, revenue, including payer mix, utilization data, financial liquidity and a balance
sheet analysis, and other data determined by the commissioners. The report must include
information about financially distressed hospitals and whether any hospitals in Minnesota
are determined to be financially distressed.
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Sec. 2.
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[144.5911] HOSPITAL STABILIZATION PROGRAM.
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Subdivision 1.
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Establishment.
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The commissioner of health must establish a hospital
stabilization program to provide financial relief to hospitals that experience financial distress
and a disproportionate level of uncompensated care.
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Subd. 2.
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Definitions.
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(a) For purposes of this section, the following terms have the
meanings given.
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(b) "Commissioner" means the commissioner of health.
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(c) "Qualifying hospital" means a hospital:
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(1) licensed under section 144.50;
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(2) located within the state;
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(3) that has filed a Medicare cost report in the Healthcare Cost Report Information
System; and
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(4) that meets at least one of the following criteria:
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(i) four or more years of negative operating margins in the past eight years; or
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(ii) a public payer mix, averaged over the past three years, of at least ... percent.
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Qualifying hospital does not include Mayo Clinic Hospital Rochester.
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(d) "Qualifying uncompensated episode of care" means the provision by a qualifying
hospital of one or more services that are covered under medical assistance to an individual
during a single patient encounter or episode of care when the:
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(1) individual is not enrolled in medical assistance, MinnesotaCare, or Medicare and
does not have other health coverage;
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(2) individual is determined to be ineligible for medical assistance and MinnesotaCare
for the date of service following any retroactive eligibility determination; and
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(3) total cumulative reimbursement amount for the services provided, if paid under
medical assistance payment methodologies, would be at least $5,000 but not more than
$50,000.
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Subd. 3.
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Application for payments.
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(a) A qualifying hospital seeking payment under
this section must submit to the commissioner documentation identifying qualifying
uncompensated episodes of care within a reporting period.
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(b) The reporting periods are:
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(1) January 1 through June 30; and
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(2) July 1 through December 31.
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(c) The initial reporting period begins January 1, 2026.
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(d) For services provided during the January 1 through June 30 reporting period, a
qualifying hospital must submit the required documentation to the commissioner by
September 15 of the same calendar year.
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(e) For services provided during the July 1 through December 31 reporting period, a
qualifying hospital must submit the required documentation to the commissioner by March
15 of the next calendar year.
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(f) Qualifying hospitals must submit documentation in a form and manner specified by
the commissioner and must provide supporting documentation as requested by the
commissioner.
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Subd. 4.
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Calculation of payments.
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(a) For each reporting period, the commissioner
must determine each qualifying hospital's share of the total value of qualifying
uncompensated episodes of care submitted under subdivision 3.
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(b) The commissioner must distribute payments proportionally based on each qualifying
hospital's share of the statewide total.
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(c) A qualifying hospital must not receive more than ten percent of the money available
for a reporting period.
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(d) If money remains after the payment limitation in paragraph (c), the commissioner
must redistribute the remaining money among qualifying hospitals that have not reached
the limit in paragraph (c) in proportion to their share of the value of qualifying
uncompensated episodes of care.
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(e) The commissioner may establish procedures to reconcile adjustments, corrected
claims, or late submissions in a subsequent reporting period.
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Subd. 5.
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Distribution of payments.
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(a) One half of the annual appropriation for this
program must be allocated to each reporting period.
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(b) For the January 1 through June 30 reporting period, the commissioner must distribute
payments no later than November 15 of the same calendar year.
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(c) For the July 1 through December 31 reporting period, the commissioner must
distribute payments no later than May 15 of the next calendar year.
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Subd. 6.
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Accountability requirements.
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(a) The commissioner must collect from a
qualifying hospital receiving payment under this section any information necessary to
evaluate the appropriate use of funds. Such information must include, at a minimum:
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(1) by December 31, 2026:
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(i) a comprehensive financial analysis that describes the sources and magnitude of the
factors that contributed to the qualifying hospital's financial distress;
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(ii) long-term capital spending priorities, including mandatory maintenance and
replacement of existing facilities and equipment; and
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(iii) a strategic plan for long-term fiscal sustainability;
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(2) ongoing quarterly reports of financial information, including unaudited quarterly
updates of audited information currently required to be submitted annually to the Department
of Health and consolidated balance sheet information; and
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(3) by June 30, 2027, a detailed analysis of how the funds were used for the purpose
described in paragraph (b).
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(b) The commissioner must require that a recipient of payment under this section uses
funds to preserve regional and local access to essential health care services, including
emergency care, inpatient hospital care, maternal care and obstetrical services, behavioral
and mental health care, and primary care and clinic services.
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(c) Upon receipt of notice by a qualifying hospital receiving payment under this section
submitted pursuant to section 144.555, the commissioner must provide notice of the hospital's
planned actions and documentation of the amount of any payment distributed to the hospital
under this section to:
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(1) the chairs and ranking minority members of the legislative committees with
jurisdiction over health and human services finance and policy; and
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(2) the majority and minority leaders of the senate and house of representatives.
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Subd. 7.
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Reporting requirements.
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The commissioner must determine the reporting
requirement for payments under this section in addition to those reporting requirements
under section 16B.98, subdivision 12.
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Subd. 8.
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Prohibited uses.
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Funds received under this section must not be used to:
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(1) supplant any other funding sources; or
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(2) increase the salary, benefits, or other discretionary payment to an officer, director,
manager, or any other executive.
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Sec. 3.
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[144.5912] COMMUNITY-BASED SAFETY NET PROVIDER
STABILIZATION PROGRAM.
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Subdivision 1.
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Establishment.
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The commissioner of health must establish a
community-based safety net provider stabilization program to provide financial relief to
community-based safety net providers that experience a disproportionate level of
uncompensated care.
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Subd. 2.
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Definitions.
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(a) For purposes of this section, the following terms have the
meanings given.
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(b) "Commissioner" means the commissioner of health.
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(c) "Qualifying community-based safety net provider" means a:
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(1) federally qualified health center under section 145.9269, subdivision 1;
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(2) certified community behavioral health clinic under section 245.735; or
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(3) community mental health center under section 256B.0625, subdivision 5.
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(d) "Qualifying uncompensated episode of care" means the provision by a qualifying
community-based safety net provider of one or more services that are covered under medical
assistance to an individual during a single patient encounter or episode of care when the:
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(1) individual is not enrolled in medical assistance, MinnesotaCare, or Medicare and
does not have other health coverage;
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(2) individual is determined to be ineligible for medical assistance and MinnesotaCare
for the date of service following any retroactive eligibility determination; and
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(3) total cumulative reimbursement amount for the services provided, if paid under
medical assistance payment methodologies, would be at least $200 but not more than $2,000.
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Subd. 3.
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Application for payments.
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(a) A qualifying community-based safety net
provider seeking payment under this section must submit to the commissioner documentation
identifying qualifying uncompensated episodes of care within the reporting period.
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(b) The reporting periods are:
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(1) January 1 through June 30; and
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(2) July 1 through December 31.
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(c) The initial reporting period begins January 1, 2026.
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(d) For services provided during the January 1 through June 30 reporting period, a
qualifying community-based safety net provider must submit the required documentation
to the commissioner by September 15 of the same calendar year.
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(e) For services provided during the July 1 through December 31 reporting period, a
qualifying community-based safety net provider must submit the required documentation
to the commissioner by March 15 of the next calendar year.
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(f) Qualifying community-based safety net providers must submit documentation in a
form and manner specified by the commissioner and must provide supporting documentation
as requested by the commissioner.
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Subd. 4.
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Calculation of payments.
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(a) For each reporting period, the commissioner
must determine each qualifying community-based safety net provider's share of the total
value of qualifying uncompensated episodes of care submitted under subdivision 3.
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(b) The commissioner must distribute payments proportionally based on each qualifying
community-based safety net provider's share of the statewide total.
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(c) A qualifying community-based safety net provider must not receive more than ten
percent of the money available for a reporting period.
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(d) If money remains after the payment limitation in paragraph (c), the commissioner
must redistribute the remaining money among qualifying community-based safety net
providers that have not reached the limit in paragraph (c) in proportion to the
community-based safety net provider's share of the value of qualifying uncompensated
episodes of care.
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(e) The commissioner may establish procedures to reconcile adjustments, corrected
claims, or late submissions in a subsequent reporting period.
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Subd. 5.
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Distribution of payments.
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(a) One half of the annual appropriation for this
program must be allocated to each reporting period.
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(b) For the January 1 through June 30 reporting period, the commissioner must distribute
payments no later than November 15 of the same calendar year.
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(c) For the July 1 through December 31 reporting period, the commissioner must
distribute payments no later than May 15 of the next calendar year.
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Sec. 4.
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HENNEPIN HEALTHCARE SYSTEM, INC., STABILIZATION GRANT.
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Subdivision 1.
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Establishment.
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The commissioner of health must award a grant to
Hennepin Healthcare System, Inc., to stabilize the HCMC operations, avoid closure of
HCMC, ensure continuation of high-quality care for HCMC patients, and preserve access
to essential services at HCMC that support the health care needs of the communities served
by HCMC and the state of Minnesota.
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Subd. 2.
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Definitions.
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(a) For purposes of this section, the following terms have the
meanings given.
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(b) "Commissioner" means the commissioner of health.
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(c) "HCMC" has the meaning given in Minnesota Statutes, section 383B.902.
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(d) "Hennepin Healthcare System, Inc.," is the public corporation created by Minnesota
Statutes, section 383B.901.
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Subd. 3.
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Accountability requirements.
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(a) The commissioner must collect from
Hennepin Healthcare System, Inc., any information necessary to complete the commissioner's
reporting requirements under subdivision 4. Such information must include, at a minimum:
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(1) a comprehensive financial analysis that describes the sources and magnitude of
HCMC's fiscal instability;
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(2) quarterly reports of financial information, including the following:
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(i) unaudited quarterly updates of audited information currently required to be submitted
annually to the Department of Health;
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(ii) total inpatient gross revenues by payer, including Medicare, medical assistance,
MinnesotaCare, commercial coverage, self-pay, other third-party payers, and other payers;
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(iii) deductions from revenue in total and by component, including but not limited to
contractual adjustments, bad debt, charity care, restricted donations, and teaching allowances;
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(iv) total capital expenditures by project;
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(v) total number of inpatient days, outpatient visits, and discharges by payer, including
Medicare, medical assistance, MinnesotaCare, commercial coverage, other third parties,
self-pay, and other payers;
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(vi) total net patient revenues by payer, including Medicare, medical assistance,
MinnesotaCare, commercial coverage, other third parties, self-pay, and other payers;
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(vii) other operating revenue; and
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(viii) nonoperating revenue net of nonoperating expenses;
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(3) long-term capital spending priorities, including mandatory maintenance and
replacement of existing facilities and equipment; and
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(4) a strategic plan for long-term fiscal sustainability. The plan must include, at a
minimum, detailed proposals to:
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(i) ensure the continued operation of critical specialized services by HCMC that are
essential to Minnesota's comprehensive statewide hospital network of rural, regional, and
safety net hospitals; and
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(ii) transition governance and control of HCMC away from the Hennepin County Board
of Commissioners acting as the governing board of Hennepin Healthcare System, Inc., and
ensure long-term management stability of Hennepin Healthcare System, Inc.
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(b) Upon receipt of notice by HCMC provided pursuant to Minnesota Statutes, section
144.555, the commissioner must provide notice of HCMC's planned actions to:
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(1) the chairs and ranking minority members of the legislative committees with
jurisdiction over health and human services finance and policy; and
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(2) the majority and minority leaders of the senate and house of representatives.
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Subd. 4.
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Reporting requirements.
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(a) By January 15, 2027, and annually thereafter
until January 15, 2030, the commissioner must report to the legislative committees with
jurisdiction over health and human services finance and policy on:
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(1) the financial stabilization of Hennepin Healthcare System, Inc., and HCMC, including
recommendations to improve stabilization of those entities; and
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(2) the financial stabilization of hospitals statewide, including recommendations to
improve stabilization of those entities.
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(b) By January 15, 2027, and annually thereafter until January 15, 2030, the legislative
auditor must report to the legislative committees with jurisdiction over health and human
services finance and policy to:
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(1) confirm whether Hennepin Healthcare System, Inc., and HCMC:
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(i) have met the requirements of this section; and
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(ii) have adhered to the strategic plan for long-term fiscal sustainability provided under
subdivision 3, paragraph (a), clause (4); and
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(2) assess the overall financial health and stability of Hennepin Healthcare System, Inc.,
and HCMC.
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(c) Hennepin Healthcare System, Inc., and HCMC must provide the commissioner and
legislative auditor with all information and documents requested by the commissioner or
legislative auditor for purposes of this subdivision.
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Subd. 5.
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Hospital stabilization program ineligibility.
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HCMC is ineligible for payment
under Minnesota Statutes, sections 144.5911 and 144.5912, in fiscal year 2027.
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Sec. 5.
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APPROPRIATIONS.
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Subdivision 1.
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Hospital stabilization program.
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$....... is appropriated in fiscal year
2027 from the general fund to the commissioner of health for the hospital stabilization
program under Minnesota Statutes, section 144.5911. This is a onetime appropriation.
Notwithstanding Minnesota Statutes, section 16B.98, subdivision 14, $....... in fiscal year
2027 is for the commissioner to administer the program.
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Subd. 2.
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Community-based safety net provider stabilization program.
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$....... is
appropriated in fiscal year 2027 from the general fund to the commissioner of health for
the community-based safety net provider stabilization program under Minnesota Statutes,
section 144.5912. This is a onetime appropriation. Notwithstanding Minnesota Statutes,
section 16B.98, subdivision 14, $....... in fiscal year 2027 is for the commissioner to
administer the program.
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Subd. 3.
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Hennepin Healthcare System, Inc., stabilization grant.
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$....... in fiscal year
2026 and $....... in fiscal year 2027 are appropriated from the general fund to the
commissioner of health for the Hennepin Healthcare System, Inc., stabilization grant. This
is a onetime appropriation. Notwithstanding Minnesota Statutes, section 16B.98, subdivision
14, $....... in fiscal year 2026 and $....... in fiscal year 2027 are for the commissioner to
administer this grant.
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Subd. 4.
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Report on financial stability of hospitals.
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$....... in fiscal year 2027 is
appropriated from the general fund to the commissioner of health to prepare the report on
the financial stability of hospitals under Minnesota Statutes, section 16A.103, subdivision
1k.
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Subd. 5.
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Rural EMS uncompensated care pool payment program.
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$....... in fiscal
year 2027 is appropriated from the general fund to the director of the Office of Emergency
Medical Services for the rural EMS uncompensated care pool payment program under
Minnesota Statutes, section 144E.55. This is a onetime appropriation. Notwithstanding
Minnesota Statutes, section 16B.98, subdivision 14, $....... in fiscal year 2027 is for the
director to administer the program.
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Subd. 6.
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Report on financial stability of hospitals.
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$....... in fiscal year 2027 is
appropriated from the general fund to the commissioner of management and budget to
prepare the report on the financial stability of hospitals under Minnesota Statutes, section
16A.103, subdivision 1k.
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