SF 5270

Introduction - 94th Legislature (2025 - 2026)

Posted on 05/06/2026 01:43 p.m.

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:

new text begin Subd. 1k. new text end

new text begin Report on financial stability of hospitals. new text end

new text begin 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.
new text end

Sec. 2.

new text begin [144.5911] HOSPITAL STABILIZATION PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin 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.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "Commissioner" means the commissioner of health.
new text end

new text begin (c) "Qualifying hospital" means a hospital:
new text end

new text begin (1) licensed under section 144.50;
new text end

new text begin (2) located within the state;
new text end

new text begin (3) that has filed a Medicare cost report in the Healthcare Cost Report Information
System; and
new text end

new text begin (4) that meets at least one of the following criteria:
new text end

new text begin (i) four or more years of negative operating margins in the past eight years; or
new text end

new text begin (ii) a public payer mix, averaged over the past three years, of at least ... percent.
new text end

new text begin Qualifying hospital does not include Mayo Clinic Hospital Rochester.
new text end

new text begin (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:
new text end

new text begin (1) individual is not enrolled in medical assistance, MinnesotaCare, or Medicare and
does not have other health coverage;
new text end

new text begin (2) individual is determined to be ineligible for medical assistance and MinnesotaCare
for the date of service following any retroactive eligibility determination; and
new text end

new text begin (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.
new text end

new text begin Subd. 3. new text end

new text begin Application for payments. new text end

new text begin (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.
new text end

new text begin (b) The reporting periods are:
new text end

new text begin (1) January 1 through June 30; and
new text end

new text begin (2) July 1 through December 31.
new text end

new text begin (c) The initial reporting period begins January 1, 2026.
new text end

new text begin (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.
new text end

new text begin (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.
new text end

new text begin (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.
new text end

new text begin Subd. 4. new text end

new text begin Calculation of payments. new text end

new text begin (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.
new text end

new text begin (b) The commissioner must distribute payments proportionally based on each qualifying
hospital's share of the statewide total.
new text end

new text begin (c) A qualifying hospital must not receive more than ten percent of the money available
for a reporting period.
new text end

new text begin (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.
new text end

new text begin (e) The commissioner may establish procedures to reconcile adjustments, corrected
claims, or late submissions in a subsequent reporting period.
new text end

new text begin Subd. 5. new text end

new text begin Distribution of payments. new text end

new text begin (a) One half of the annual appropriation for this
program must be allocated to each reporting period.
new text end

new text begin (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.
new text end

new text begin (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.
new text end

new text begin Subd. 6. new text end

new text begin Accountability requirements. new text end

new text begin (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:
new text end

new text begin (1) by December 31, 2026:
new text end

new text begin (i) a comprehensive financial analysis that describes the sources and magnitude of the
factors that contributed to the qualifying hospital's financial distress;
new text end

new text begin (ii) long-term capital spending priorities, including mandatory maintenance and
replacement of existing facilities and equipment; and
new text end

new text begin (iii) a strategic plan for long-term fiscal sustainability;
new text end

new text begin (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
new text end

new text begin (3) by June 30, 2027, a detailed analysis of how the funds were used for the purpose
described in paragraph (b).
new text end

new text begin (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.
new text end

new text begin (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:
new text end

new text begin (1) the chairs and ranking minority members of the legislative committees with
jurisdiction over health and human services finance and policy; and
new text end

new text begin (2) the majority and minority leaders of the senate and house of representatives.
new text end

new text begin Subd. 7. new text end

new text begin Reporting requirements. new text end

new text begin The commissioner must determine the reporting
requirement for payments under this section in addition to those reporting requirements
under section 16B.98, subdivision 12.
new text end

new text begin Subd. 8. new text end

new text begin Prohibited uses. new text end

new text begin Funds received under this section must not be used to:
new text end

new text begin (1) supplant any other funding sources; or
new text end

new text begin (2) increase the salary, benefits, or other discretionary payment to an officer, director,
manager, or any other executive.
new text end

Sec. 3.

new text begin [144.5912] COMMUNITY-BASED SAFETY NET PROVIDER
STABILIZATION PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin 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.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "Commissioner" means the commissioner of health.
new text end

new text begin (c) "Qualifying community-based safety net provider" means a:
new text end

new text begin (1) federally qualified health center under section 145.9269, subdivision 1;
new text end

new text begin (2) certified community behavioral health clinic under section 245.735; or
new text end

new text begin (3) community mental health center under section 256B.0625, subdivision 5.
new text end

new text begin (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:
new text end

new text begin (1) individual is not enrolled in medical assistance, MinnesotaCare, or Medicare and
does not have other health coverage;
new text end

new text begin (2) individual is determined to be ineligible for medical assistance and MinnesotaCare
for the date of service following any retroactive eligibility determination; and
new text end

new text begin (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.
new text end

new text begin Subd. 3. new text end

new text begin Application for payments. new text end

new text begin (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.
new text end

new text begin (b) The reporting periods are:
new text end

new text begin (1) January 1 through June 30; and
new text end

new text begin (2) July 1 through December 31.
new text end

new text begin (c) The initial reporting period begins January 1, 2026.
new text end

new text begin (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.
new text end

new text begin (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.
new text end

new text begin (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.
new text end

new text begin Subd. 4. new text end

new text begin Calculation of payments. new text end

new text begin (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.
new text end

new text begin (b) The commissioner must distribute payments proportionally based on each qualifying
community-based safety net provider's share of the statewide total.
new text end

new text begin (c) A qualifying community-based safety net provider must not receive more than ten
percent of the money available for a reporting period.
new text end

new text begin (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.
new text end

new text begin (e) The commissioner may establish procedures to reconcile adjustments, corrected
claims, or late submissions in a subsequent reporting period.
new text end

new text begin Subd. 5. new text end

new text begin Distribution of payments. new text end

new text begin (a) One half of the annual appropriation for this
program must be allocated to each reporting period.
new text end

new text begin (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.
new text end

new text begin (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.
new text end

Sec. 4. new text begin HENNEPIN HEALTHCARE SYSTEM, INC., STABILIZATION GRANT.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin 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.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "Commissioner" means the commissioner of health.
new text end

new text begin (c) "HCMC" has the meaning given in Minnesota Statutes, section 383B.902.
new text end

new text begin (d) "Hennepin Healthcare System, Inc.," is the public corporation created by Minnesota
Statutes, section 383B.901.
new text end

new text begin Subd. 3. new text end

new text begin Accountability requirements. new text end

new text begin (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:
new text end

new text begin (1) a comprehensive financial analysis that describes the sources and magnitude of
HCMC's fiscal instability;
new text end

new text begin (2) quarterly reports of financial information, including the following:
new text end

new text begin (i) unaudited quarterly updates of audited information currently required to be submitted
annually to the Department of Health;
new text end

new text begin (ii) total inpatient gross revenues by payer, including Medicare, medical assistance,
MinnesotaCare, commercial coverage, self-pay, other third-party payers, and other payers;
new text end

new text begin (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;
new text end

new text begin (iv) total capital expenditures by project;
new text end

new text begin (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;
new text end

new text begin (vi) total net patient revenues by payer, including Medicare, medical assistance,
MinnesotaCare, commercial coverage, other third parties, self-pay, and other payers;
new text end

new text begin (vii) other operating revenue; and
new text end

new text begin (viii) nonoperating revenue net of nonoperating expenses;
new text end

new text begin (3) long-term capital spending priorities, including mandatory maintenance and
replacement of existing facilities and equipment; and
new text end

new text begin (4) a strategic plan for long-term fiscal sustainability. The plan must include, at a
minimum, detailed proposals to:
new text end

new text begin (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
new text end

new text begin (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.
new text end

new text begin (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:
new text end

new text begin (1) the chairs and ranking minority members of the legislative committees with
jurisdiction over health and human services finance and policy; and
new text end

new text begin (2) the majority and minority leaders of the senate and house of representatives.
new text end

new text begin Subd. 4. new text end

new text begin Reporting requirements. new text end

new text begin (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:
new text end

new text begin (1) the financial stabilization of Hennepin Healthcare System, Inc., and HCMC, including
recommendations to improve stabilization of those entities; and
new text end

new text begin (2) the financial stabilization of hospitals statewide, including recommendations to
improve stabilization of those entities.
new text end

new text begin (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:
new text end

new text begin (1) confirm whether Hennepin Healthcare System, Inc., and HCMC:
new text end

new text begin (i) have met the requirements of this section; and
new text end

new text begin (ii) have adhered to the strategic plan for long-term fiscal sustainability provided under
subdivision 3, paragraph (a), clause (4); and
new text end

new text begin (2) assess the overall financial health and stability of Hennepin Healthcare System, Inc.,
and HCMC.
new text end

new text begin (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.
new text end

new text begin Subd. 5. new text end

new text begin Hospital stabilization program ineligibility. new text end

new text begin HCMC is ineligible for payment
under Minnesota Statutes, sections 144.5911 and 144.5912, in fiscal year 2027.
new text end

Sec. 5. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Hospital stabilization program. new text end

new text begin $....... 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.
new text end

new text begin Subd. 2. new text end

new text begin Community-based safety net provider stabilization program. new text end

new text begin $....... 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.
new text end

new text begin Subd. 3. new text end

new text begin Hennepin Healthcare System, Inc., stabilization grant. new text end

new text begin $....... 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.
new text end

new text begin Subd. 4. new text end

new text begin Report on financial stability of hospitals. new text end

new text begin $....... 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.
new text end

new text begin Subd. 5. new text end

new text begin Rural EMS uncompensated care pool payment program. new text end

new text begin $....... 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.
new text end

new text begin Subd. 6. new text end

new text begin Report on financial stability of hospitals. new text end

new text begin $....... 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.
new text end