Bill seeks to fix 'unsustainable' medical assistance rates

Critical medical services for people that need it most are at a breaking point.

That is the message the House Human Services Finance and Policy Committee heard on Tuesday.

“We all know that medical assistance, or MA, is critical for health care coverage in Minnesota,” said Rep. Robert Bierman (DFL-Apple Valley). “Reimbursement rates to providers who serve these Minnesotan’s have fallen woefully behind. Our current rates are unsustainable and have created a crisis in access to care.”

He sponsors HF1005 that, as amended, would require the Department of Human Services to implement the recommended higher rates found in the Minnesota Health Care Programs Outpatient Services Rates Study.

The bill was laid over for possible omnibus bill inclusion.

Published in January 2024, that study provided an analysis of the current rate-setting methodology for all outpatient services in MA and MinnesotaCare, including rates for behavioral health, substance use disorder, and residential substance use disorder treatment.

The bill would also increase all resource-based relative value scale physician and professional services rates to at least 100 percent of Medicare rates, increase and standardize behavioral health home monthly rates, provide base funding to increase MA reimbursement rates for inpatient hospital behavioral health services, and remove the provision-setting payments for mental health services provided by masters-prepared mental health professionals at 80 percent of the rate paid to doctoral-prepared professionals.

“The increased reimbursement rates proposed in this bill will improve access to care and advance health equity for all Minnesota patients in every corner of the state,” said Dr. Roli Dwivedi, a University of Minnesota associate professor and president of the Minnesota Academy of Family Physicians. “In addition, it will help clinics throughout the state stay in business and avoid having to merge with larger systems.”

No fiscal note was provided, but Rep. Dave Baker (R-Willmar) said the cost would be extensive resulting in the proposed change being phased in over time.

“If we can't keep up with the MA rates and Medicaid rates we are going to lose all of our advances that we've done over the last few years,” Baker said.

The first phase would take effect Jan. 1, 2026 and increase mental health and physician service rates that have Medicare equivalent as well as all other children's mental health community based services that don't have a Medicare equivalent.

The second phase would start in 2027 and increase rates for all other adult community based mental health services that don't have a Medicare equivalent as well as increase rates for masters level clinicians by repealing their current cut back.

Starting in 2028, the final phase would increase rates for behavioral health homes and fee-for-service hospital inpatient mental health services.