HF 1005

as introduced - 94th Legislature (2025 - 2026) Posted on 02/20/2025 05:09pm

A bill for an act
relating to health insurance; establishing medical assistance rate adjustments for
physician and professional services; increasing rates for certain residential services;
requiring a statewide reimbursement rate for behavioral health home services;
amending Minnesota Statutes 2024, sections 256.969, subdivision 2b; 256B.0757,
subdivision 5, by adding a subdivision; 256B.76, subdivisions 1, 6; 256B.761;
proposing coding for new law in Minnesota Statutes, chapter 256B; repealing
Minnesota Statutes 2024, section 256B.0625, subdivision 38.

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

Section 1.

Minnesota Statutes 2024, section 256.969, subdivision 2b, is amended to read:

Subd. 2b.

Hospital payment rates.

(a) For discharges occurring on or after November
1, 2014, hospital inpatient services for hospitals located in Minnesota shall be paid according
to the following:

(1) critical access hospitals as defined by Medicare shall be paid using a cost-based
methodology;

(2) long-term hospitals as defined by Medicare shall be paid on a per diem methodology
under subdivision 25;

(3) rehabilitation hospitals or units of hospitals that are recognized as rehabilitation
distinct parts as defined by Medicare shall be paid according to the methodology under
subdivision 12; and

(4) all other hospitals shall be paid on a diagnosis-related group (DRG) methodology.

(b) For the period beginning January 1, 2011, through October 31, 2014, rates shall not
be rebased, except that a Minnesota long-term hospital shall be rebased effective January
1, 2011, based on its most recent Medicare cost report ending on or before September 1,
2008, with the provisions under subdivisions 9 and 23, based on the rates in effect on
December 31, 2010. For rate setting periods after November 1, 2014, in which the base
years are updated, a Minnesota long-term hospital's base year shall remain within the same
period as other hospitals.

(c) Effective for discharges occurring on and after November 1, 2014, payment rates
for hospital inpatient services provided by hospitals located in Minnesota or the local trade
area, except for the hospitals paid under the methodologies described in paragraph (a),
clauses (2) and (3), shall be rebased, incorporating cost and payment methodologies in a
manner similar to Medicare. The base year or years for the rates effective November 1,
2014, shall be calendar year 2012. The rebasing under this paragraph shall be budget neutral,
ensuring that the total aggregate payments under the rebased system are equal to the total
aggregate payments that were made for the same number and types of services in the base
year. Separate budget neutrality calculations shall be determined for payments made to
critical access hospitals and payments made to hospitals paid under the DRG system. Only
the rate increases or decreases under subdivision 3a or 3c that applied to the hospitals being
rebased during the entire base period shall be incorporated into the budget neutrality
calculation.

(d) For discharges occurring on or after November 1, 2014, through the next rebasing
that occurs, the rebased rates under paragraph (c) that apply to hospitals under paragraph
(a), clause (4), shall include adjustments to the projected rates that result in no greater than
a five percent increase or decrease from the base year payments for any hospital. Any
adjustments to the rates made by the commissioner under this paragraph and paragraph (e)
shall maintain budget neutrality as described in paragraph (c).

(e) For discharges occurring on or after November 1, 2014, the commissioner may make
additional adjustments to the rebased rates, and when evaluating whether additional
adjustments should be made, the commissioner shall consider the impact of the rates on the
following:

(1) pediatric services;

(2) behavioral health services;

(3) trauma services as defined by the National Uniform Billing Committee;

(4) transplant services;

(5) obstetric services, newborn services, and behavioral health services provided by
hospitals outside the seven-county metropolitan area;

(6) outlier admissions;

(7) low-volume providers; and

(8) services provided by small rural hospitals that are not critical access hospitals.

(f) Hospital payment rates established under paragraph (c) must incorporate the following:

(1) for hospitals paid under the DRG methodology, the base year payment rate per
admission is standardized by the applicable Medicare wage index and adjusted by the
hospital's disproportionate population adjustment;

(2) for critical access hospitals, payment rates for discharges between November 1, 2014,
and June 30, 2015, shall be set to the same rate of payment that applied for discharges on
October 31, 2014;

(3) the cost and charge data used to establish hospital payment rates must only reflect
inpatient services covered by medical assistance; and

(4) in determining hospital payment rates for discharges occurring on or after the rate
year beginning January 1, 2011, through December 31, 2012, the hospital payment rate per
discharge shall be based on the cost-finding methods and allowable costs of the Medicare
program in effect during the base year or years. In determining hospital payment rates for
discharges in subsequent base years, the per discharge rates shall be based on the cost-finding
methods and allowable costs of the Medicare program in effect during the base year or
years.

(g) The commissioner shall validate the rates effective November 1, 2014, by applying
the rates established under paragraph (c), and any adjustments made to the rates under
paragraph (d) or (e), to hospital claims paid in calendar year 2013 to determine whether the
total aggregate payments for the same number and types of services under the rebased rates
are equal to the total aggregate payments made during calendar year 2013.

(h) Effective for discharges occurring on or after July 1, 2017, and every two years
thereafter, payment rates under this section shall be rebased to reflect only those changes
in hospital costs between the existing base year or years and the next base year or years. In
any year that inpatient claims volume falls below the threshold required to ensure a
statistically valid sample of claims, the commissioner may combine claims data from two
consecutive years to serve as the base year. Years in which inpatient claims volume is
reduced or altered due to a pandemic or other public health emergency shall not be used as
a base year or part of a base year if the base year includes more than one year. Changes in
costs between base years shall be measured using the lower of the hospital cost index defined
in subdivision 1, paragraph (a), or the percentage change in the case mix adjusted cost per
claim. The commissioner shall establish the base year for each rebasing period considering
the most recent year or years for which filed Medicare cost reports are available, except
that the base years for the rebasing effective July 1, 2023, are calendar years 2018 and 2019.
The estimated change in the average payment per hospital discharge resulting from a
scheduled rebasing must be calculated and made available to the legislature by January 15
of each year in which rebasing is scheduled to occur, and must include by hospital the
differential in payment rates compared to the individual hospital's costs.

(i) Effective for discharges occurring on or after July 1, 2015, inpatient payment rates
for critical access hospitals located in Minnesota or the local trade area shall be determined
using a new cost-based methodology. The commissioner shall establish within the
methodology tiers of payment designed to promote efficiency and cost-effectiveness.
Payment rates for hospitals under this paragraph shall be set at a level that does not exceed
the total cost for critical access hospitals as reflected in base year cost reports. Until the
next rebasing that occurs, the new methodology shall result in no greater than a five percent
decrease from the base year payments for any hospital, except a hospital that had payments
that were greater than 100 percent of the hospital's costs in the base year shall have their
rate set equal to 100 percent of costs in the base year. The rates paid for discharges on and
after July 1, 2016, covered under this paragraph shall be increased by the inflation factor
in subdivision 1, paragraph (a). The new cost-based rate shall be the final rate and shall not
be settled to actual incurred costs. Hospitals shall be assigned a payment tier based on the
following criteria:

(1) hospitals that had payments at or below 80 percent of their costs in the base year
shall have a rate set that equals 85 percent of their base year costs;

(2) hospitals that had payments that were above 80 percent, up to and including 90
percent of their costs in the base year shall have a rate set that equals 95 percent of their
base year costs; and

(3) hospitals that had payments that were above 90 percent of their costs in the base year
shall have a rate set that equals 100 percent of their base year costs.

(j) The commissioner may refine the payment tiers and criteria for critical access hospitals
to coincide with the next rebasing under paragraph (h). The factors used to develop the new
methodology may include, but are not limited to:

(1) the ratio between the hospital's costs for treating medical assistance patients and the
hospital's charges to the medical assistance program;

(2) the ratio between the hospital's costs for treating medical assistance patients and the
hospital's payments received from the medical assistance program for the care of medical
assistance patients;

(3) the ratio between the hospital's charges to the medical assistance program and the
hospital's payments received from the medical assistance program for the care of medical
assistance patients;

(4) the statewide average increases in the ratios identified in clauses (1), (2), and (3);

(5) the proportion of that hospital's costs that are administrative and trends in
administrative costs; and

(6) geographic location.

(k) Subject to subdivision 2g, effective for discharges occurring on or after January 1,
2024, the rates paid to hospitals described in paragraph (a), clauses (2) to (4), must include
a rate factor specific to each hospital that qualifies for a medical education and research
cost distribution under section 62J.692, subdivision 4, paragraph (a).

new text begin (l) Effective for discharges occurring on or after January 1, 2028, the commissioner
must increase:
new text end

new text begin (1) payments for inpatient behavioral health services provided by hospitals paid under
the DRG methodology by increasing the adjustment for behavioral health services under
section 256.969, subdivision 2b, paragraph (e); and
new text end

new text begin (2) capitation payments made to managed care plans and county-based purchasing plans
to reflect the rate increase provided under this paragraph. Managed care and county-based
purchasing plans must use the capitation rate increase provided under this clause to increase
payment rates for inpatient behavioral health services provided by hospitals paid under the
DRG methodology. The commissioner must monitor the effect of this rate increase on
enrollee access to behavioral health services. If for any contract year federal approval is not
received for this clause, the commissioner must adjust the capitation rates paid to managed
care plans and county-based purchasing plans for that contract year to reflect the removal
of this clause. Contracts between managed care plans and county-based purchasing plans
and providers to whom this paragraph applies must allow recovery of payments from those
providers if capitation rates are adjusted in accordance with this clause. Payment recoveries
must not exceed the amount equal to any increase in rates that results from this paragraph.
new text end

Sec. 2.

Minnesota Statutes 2024, section 256B.0757, subdivision 5, is amended to read:

Subd. 5.

Payments.

new text begin (a) new text end The commissioner shall make payments to each designated
provider for the provision of health home services described in subdivision 3 to each eligible
individual under subdivision 2 that selects the health home as a provider. new text begin This paragraph
expires on the date that paragraph (b) becomes effective.
new text end

new text begin (b) Effective January 1, 2028, or upon federal approval, whichever is later, the
commissioner shall make payments to each designated provider for the provision of health
home services described in subdivision 3, except for behavioral health services, to each
eligible individual under subdivision 2 who selects the health home as a provider.
new text end

Sec. 3.

Minnesota Statutes 2024, section 256B.0757, is amended by adding a subdivision
to read:

new text begin Subd. 5a. new text end

new text begin Payments for behavioral health home services. new text end

new text begin (a) Notwithstanding
subdivision 5, the commissioner must implement a single statewide reimbursement rate for
behavioral health home services under this section. The rate must be no less than $425 per
member per month. The commissioner must adjust the statewide reimbursement rate annually
according to the change from the midpoint of the previous rate year to the midpoint of the
rate year for which the rate is being determined using the Centers for Medicare and Medicaid
Services Medicare Economic Index as forecasted in the fourth quarter of the calendar year
before the rate year.
new text end

new text begin (b) The commissioner must review and update the behavioral health home services rate
under paragraph (a) at least every four years. The updated rate must account for the average
hours required for behavioral health home team members spent providing services and the
Department of Labor prevailing wage for required behavioral health home team members.
The updated rate must ensure that behavioral health home services rates are sufficient to
allow providers to meet required certifications, training, and practice transformation
standards; staff qualification requirements; and service delivery standards.
new text end

new text begin (c) This section is effective January 1, 2028, or upon federal approval, whichever is
later.
new text end

Sec. 4.

new text begin [256B.757] REIMBURSEMENT RATES FOR OBSTETRIC AND
GYNECOLOGIC SERVICES.
new text end

new text begin Subdivision 1. new text end

new text begin Obstetric and gynecologic minimum rate. new text end

new text begin Effective for services rendered
on or after January 1, 2026, or the date of federal approval, whichever is later, rates for
obstetric and gynecologic services reimbursed under the resource-based relative value scale
must be at least equal to 100 percent of the Medicare Physician Fee Schedule.
new text end

new text begin Subd. 2. new text end

new text begin Capitation payments. new text end

new text begin Effective for services rendered on or after January 1,
2026, or the date of federal approval, whichever is later, the commissioner shall increase
capitation payments made to managed care plans and county-based purchasing plans to
reflect the rate increases provided under this section. Managed care plans and county-based
purchasing plans must use the capitation rate increase provided under this subdivision to
increase payment rates to the providers corresponding to the rate increases. The commissioner
must monitor the effect of this rate increase on enrollee access to services under this section.
If for any contract year federal approval is not received for this subdivision, the commissioner
must adjust the capitation rates paid to managed care plans and county-based purchasing
plans for that contract year to reflect the removal of this subdivision. Contracts between
managed care plans and county-based purchasing plans and providers to whom this
subdivision applies must allow recovery of payments from those providers if capitation
rates are adjusted in accordance with this subdivision. Payment recoveries must not exceed
the amount equal to any increase in rates that results from this subdivision.
new text end

new text begin Subd. 3. new text end

new text begin Medicare physician fee schedule. new text end

new text begin For purposes of this section, the applicable
Medicare Physician Fee Schedule is the most recent Medicare Physician Fee Schedule Final
Rule issued by the Centers for Medicare and Medicaid Services in effect at the time the
service was rendered.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Subdivision 3 is effective January 1, 2026, or upon federal
approval, whichever is later. The commissioner shall notify the revisor of statutes when
federal approval is obtained.
new text end

Sec. 5.

Minnesota Statutes 2024, section 256B.76, subdivision 1, is amended to read:

Subdivision 1.

Physician and professional services reimbursement.

deleted text begin (a) Effective for
services rendered on or after October 1, 1992, the commissioner shall make payments for
physician services as follows:
deleted text end

deleted text begin (1) payment for level one Centers for Medicare and Medicaid Services' common
procedural coding system codes titled "office and other outpatient services," "preventive
medicine new and established patient," "delivery, antepartum, and postpartum care," "critical
care," cesarean delivery and pharmacologic management provided to psychiatric patients,
and level three codes for enhanced services for prenatal high risk, shall be paid at the lower
of (i) submitted charges, or (ii) 25 percent above the rate in effect on June 30, 1992;
deleted text end

deleted text begin (2) payments for all other services shall be paid at the lower of (i) submitted charges,
or (ii) 15.4 percent above the rate in effect on June 30, 1992; and
deleted text end

deleted text begin (3) all physician rates shall be converted from the 50th percentile of 1982 to the 50th
percentile of 1989, less the percent in aggregate necessary to equal the above increases
except that payment rates for home health agency services shall be the rates in effect on
September 30, 1992.
deleted text end

deleted text begin (b) Effective for services rendered on or after January 1, 2000, payment rates for physician
and professional services shall be increased by three percent over the rates in effect on
December 31, 1999, except for home health agency and family planning agency services.
The increases in this paragraph shall be implemented January 1, 2000, for managed care.
deleted text end

deleted text begin (c) Effective for services rendered on or after July 1, 2009, payment rates for physician
and professional services shall be reduced by five percent, except that for the period July
1, 2009, through June 30, 2010, payment rates shall be reduced by 6.5 percent for the medical
assistance and general assistance medical care programs, over the rates in effect on June
30, 2009. This reduction and the reductions in paragraph (d) do not apply to office or other
outpatient visits, preventive medicine visits and family planning visits billed by physicians,
advanced practice registered nurses, or physician assistants in a family planning agency or
in one of the following primary care practices: general practice, general internal medicine,
general pediatrics, general geriatrics, and family medicine. This reduction and the reductions
in paragraph (d) do not apply to federally qualified health centers, rural health centers, and
Indian health services. Effective October 1, 2009, payments made to managed care plans
and county-based purchasing plans under sections 256B.69, 256B.692, and 256L.12 shall
reflect the payment reduction described in this paragraph.
deleted text end

deleted text begin (d) Effective for services rendered on or after July 1, 2010, payment rates for physician
and professional services shall be reduced an additional seven percent over the five percent
reduction in rates described in paragraph (c). This additional reduction does not apply to
physical therapy services, occupational therapy services, and speech pathology and related
services provided on or after July 1, 2010. This additional reduction does not apply to
physician services billed by a psychiatrist or an advanced practice registered nurse with a
specialty in mental health. Effective October 1, 2010, payments made to managed care plans
and county-based purchasing plans under sections 256B.69, 256B.692, and 256L.12 shall
reflect the payment reduction described in this paragraph.
deleted text end

deleted text begin (e) Effective for services rendered on or after September 1, 2011, through June 30, 2013,
payment rates for physician and professional services shall be reduced three percent from
the rates in effect on August 31, 2011. This reduction does not apply to physical therapy
services, occupational therapy services, and speech pathology and related services.
deleted text end

deleted text begin (f) Effective for services rendered on or after September 1, 2014, payment rates for
physician and professional services, including physical therapy, occupational therapy, speech
pathology, and mental health services shall be increased by five percent from the rates in
effect on August 31, 2014. In calculating this rate increase, the commissioner shall not
include in the base rate for August 31, 2014, the rate increase provided under section
256B.76, subdivision 7. This increase does not apply to federally qualified health centers,
rural health centers, and Indian health services. Payments made to managed care plans and
county-based purchasing plans shall not be adjusted to reflect payments under this paragraph.
deleted text end

deleted text begin (g) deleted text end new text begin (a) new text end Effective for services rendered on or after July 1, 2015, payment rates for physical
therapy, occupational therapy, and speech pathology and related services provided by a
hospital meeting the criteria specified in section 62Q.19, subdivision 1, paragraph (a), clause
(4), shall be increased by 90 percent from the rates in effect on June 30, 2015. Payments
made to managed care plans and county-based purchasing plans shall not be adjusted to
reflect payments under this paragraph.

deleted text begin (h) deleted text end new text begin (b) new text end Any ratables effective before July 1, 2015, do not apply to early intensive
developmental and behavioral intervention (EIDBI) benefits described in section 256B.0949.

deleted text begin (i) deleted text end new text begin (c) new text end The commissioner may reimburse physicians and other licensed professionals for
costs incurred to pay the fee for testing newborns who are medical assistance enrollees for
heritable and congenital disorders under section 144.125, subdivision 1, paragraph (c), when
the sample is collected outside of an inpatient hospital or freestanding birth center and the
cost is not recognized by another payment source.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2026, or upon federal approval
of the amendments in this act to section 256B.76, subdivision 6, whichever is later. The
commissioner of human services shall notify the revisor of statutes when federal approval
is obtained.
new text end

Sec. 6.

Minnesota Statutes 2024, section 256B.76, subdivision 6, is amended to read:

Subd. 6.

Medicare relative value units.

(a) Effective for services rendered on or after
January 1, 2007, the commissioner shall make payments for physician and professional
services based on the Medicare relative value units (RVUs). This change shall be budget
neutral and the cost of implementing RVUs will be incorporated in the established conversion
factor. new text begin This paragraph expires on the date that paragraph (b) becomes effective.
new text end

new text begin (b) Effective January 1, 2026, or upon federal approval, whichever is later, and effective
for services rendered on or after January 1, 2007, the commissioner shall make payments
for physician and professional services based on the Medicare relative value units (RVUs).
new text end

deleted text begin (b) deleted text end new text begin (c) new text end Effective for services rendered on or after January 1, 2025, rates for mental health
services reimbursed under the resource-based relative value scale (RBRVS) must be equal
to 83 percent of the Medicare Physician Fee Schedule. new text begin This paragraph expires on the date
that paragraph (d) becomes effective.
new text end

new text begin (d) Effective January 1, 2026, or upon federal approval, whichever is later, and effective
for services rendered on or after January 1, 2026, or the date of federal approval, whichever
is later, rates for all physician and professional services must be at least equal to 100 percent
of the Medicare Physician Fee Schedule.
new text end

deleted text begin (c) deleted text end new text begin (e) new text end Effective for services rendered on or after January 1, 2025, the commissioner
shall increase capitation payments made to managed care plans and county-based purchasing
plans to reflect the rate increases provided under this subdivision. Managed care plans and
county-based purchasing plans must use the capitation rate increase provided under this
paragraph to increase payment rates to the providers corresponding to the rate increases.
The commissioner must monitor the effect of this rate increase on enrollee access to services
under this subdivision. If for any contract year federal approval is not received for this
paragraph, the commissioner must adjust the capitation rates paid to managed care plans
and county-based purchasing plans for that contract year to reflect the removal of this
paragraph. Contracts between managed care plans and county-based purchasing plans and
providers to whom this paragraph applies must allow recovery of payments from those
providers if capitation rates are adjusted in accordance with this paragraph. Payment
recoveries must not exceed the amount equal to any increase in rates that results from this
paragraph.

new text begin (f) For purposes of this subdivision, the applicable Medicare Physician Fee Schedule is
the most recent Medicare Physician Fee Schedule Final Rule issued by the Centers for
Medicare and Medicaid Services in effect at the time the service was rendered.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraph (f) is effective January 1, 2026, or upon federal
approval, whichever is later. The commissioner of human services shall notify the revisor
of statutes when federal approval is obtained.
new text end

Sec. 7.

Minnesota Statutes 2024, section 256B.761, is amended to read:

256B.761 REIMBURSEMENT FOR MENTAL HEALTH SERVICES.

(a) Effective for services rendered on or after July 1, 2001, payment for medication
management provided to psychiatric patients, outpatient mental health services, day treatment
services, home-based mental health services, and family community support services shall
be paid at the lower of (1) submitted charges, or (2) 75.6 percent of the 50th percentile of
1999 charges.

(b) Effective July 1, 2001, the medical assistance rates for outpatient mental health
services provided by an entity that operates: (1) a Medicare-certified comprehensive
outpatient rehabilitation facility; and (2) a facility that was certified prior to January 1, 1993,
with at least 33 percent of the clients receiving rehabilitation services in the most recent
calendar year who are medical assistance recipients, will be increased by 38 percent, when
those services are provided within the comprehensive outpatient rehabilitation facility and
provided to residents of nursing facilities owned by the entity.

(c) In addition to rate increases otherwise provided, the commissioner may restructure
coverage policy and rates to improve access to adult rehabilitative mental health services
under section 256B.0623 and related mental health support services under section 256B.021,
subdivision 4, paragraph (f), clause (2). For state fiscal years 2015 and 2016, the projected
state share of increased costs due to this paragraph is transferred from adult mental health
grants under sections 245.4661 and 256K.10. The transfer for fiscal year 2016 is a permanent
base adjustment for subsequent fiscal years. Payments made to managed care plans and
county-based purchasing plans under sections 256B.69, 256B.692, and 256L.12 shall reflect
the rate changes described in this paragraph.

(d) Any ratables effective before July 1, 2015, do not apply to early intensive
developmental and behavioral intervention (EIDBI) benefits described in section 256B.0949.

(e) Effective for services rendered on or after January 1, 2024, payment rates for
behavioral health services included in the rate analysis required by Laws 2021, First Special
Session chapter 7, article 17, section 18, except for adult day treatment services under section
256B.0671, subdivision 3; early intensive developmental and behavioral intervention services
under section 256B.0949; and substance use disorder services under chapter 254B, must be
increased by three percent from the rates in effect on December 31, 2023. Effective for
services rendered on or after January 1, 2025, payment rates for behavioral health services
included in the rate analysis required by Laws 2021, First Special Session chapter 7, article
17, section 18; early intensive developmental behavioral intervention services under section
256B.0949; and substance use disorder services under chapter 254B, must be annually
adjusted according to the change from the midpoint of the previous rate year to the midpoint
of the rate year for which the rate is being determined using the Centers for Medicare and
Medicaid Services Medicare Economic Index as forecasted in the fourth quarter of the
calendar year before the rate year. For payments made in accordance with this paragraph,
if and to the extent that the commissioner identifies that the state has received federal
financial participation for behavioral health services in excess of the amount allowed under
United States Code, title 42, section 447.321, the state shall repay the excess amount to the
Centers for Medicare and Medicaid Services with state money and maintain the full payment
rate under this paragraph. This paragraph does not apply to federally qualified health centers,
rural health centers, Indian health services, certified community behavioral health clinics,
cost-based rates, and rates that are negotiated with the county. This paragraph expires upon
legislative implementation of the new rate methodology resulting from the rate analysis
required by Laws 2021, First Special Session chapter 7, article 17, section 18.

(f) Effective January 1, 2024, the commissioner shall increase capitation payments made
to managed care plans and county-based purchasing plans to reflect the behavioral health
service rate increase provided in paragraph (e). Managed care and county-based purchasing
plans must use the capitation rate increase provided under this paragraph to increase payment
rates to behavioral health services providers. The commissioner must monitor the effect of
this rate increase on enrollee access to behavioral health services. If for any contract year
federal approval is not received for this paragraph, the commissioner must adjust the
capitation rates paid to managed care plans and county-based purchasing plans for that
contract year to reflect the removal of this provision. Contracts between managed care plans
and county-based purchasing plans and providers to whom this paragraph applies must
allow recovery of payments from those providers if capitation rates are adjusted in accordance
with this paragraph. Payment recoveries must not exceed the amount equal to any increase
in rates that results from this provision.

new text begin (g) Effective for services rendered on or after January 1, 2026, or the date of federal
approval, whichever is later:
new text end

new text begin (1) rates for mental health services reimbursed under the resource-based relative value
scale must be at least equal to 100 percent of the Medicare Physician Fee Schedule; and
new text end

new text begin (2) the commissioner must increase capitation payments made to managed care plans
and county-based purchasing plans to reflect the rate increases provided under this paragraph.
Managed care plans and county-based purchasing plans must use the capitation rate increase
provided under this clause to increase payment rates to the providers corresponding to the
rate increases. The commissioner must monitor the effect of this rate increase on enrollee
access to services under this paragraph. If for any contract year federal approval is not
received for this clause, the commissioner must adjust the capitation rates paid to managed
care plans and county-based purchasing plans for that contract year to reflect the removal
of this clause. Contracts between managed care plans and county-based purchasing plans
and providers to whom this clause applies must allow recovery of payments from those
providers if capitation rates are adjusted in accordance with this clause. Payment recoveries
must not exceed the amount equal to any increase in rates that results from this clause.
new text end

new text begin (h) Effective for services under this section billed and coded under Healthcare Common
Procedure Coding System H, T, and S, and rendered on or after January 1, 2027, or the date
of federal approval, whichever is later, the commissioner must increase reimbursement rates
as necessary to align with the Medicare Physician Fee Schedule.
new text end

new text begin (i) Effective for children's therapeutic supports and services under section 256B.0943,
subdivision 2, and services under section 245.488, rendered on or after January 1, 2026, or
the date of federal approval, whichever is later, the commissioner must increase:
new text end

new text begin (1) reimbursement rates as necessary to align with the Medicare Physician Fee Schedule;
and
new text end

new text begin (2) capitation payments made to managed care plans and county-based purchasing plans
to reflect the rate increases provided under this paragraph. Managed care plans and
county-based purchasing plans must use the capitation rate increase provided under this
clause to increase payment rates to the providers corresponding to the rate increases. The
commissioner must monitor the effect of this rate increase on enrollee access to services
under this paragraph. If for any contract year federal approval is not received for this clause,
the commissioner must adjust the capitation rates paid to managed care plans and
county-based purchasing plans for that contract year to reflect the removal of this clause.
Contracts between managed care plans and county-based purchasing plans and providers
to whom this clause applies must allow recovery of payments from those providers if
capitation rates are adjusted in accordance with this clause. Payment recoveries must not
exceed the amount equal to any increase in rates that results from this clause.
new text end

new text begin (j) Paragraph (i) does not apply to federally qualified health centers, rural health centers,
Indian health services, certified community behavioral health clinics, cost-based rates,
psychiatric residential treatment facilities, and children's residential services and rates that
are negotiated with the county.
new text end

new text begin (k) For behavioral health services included in the rate analysis required by Laws 2021,
First Special Session chapter 7, article 17, section 18, except for adult day treatment services
under section 256B.0671, subdivision 3; early intensive developmental and behavioral
intervention services under section 256B.0949; and substance use disorder services under
chapter 254B, managed care plans and county-based purchasing plans must reimburse the
providers at a rate that is at least equal to the fee-for-service payment rate. The commissioner
must monitor the effect of this requirement on the rate of access to the services delivered
by providers of behavioral health services.
new text end

new text begin (l) For purposes of this section, the applicable Medicare Physician Fee Schedule is the
most recent Medicare Physician Fee Schedule Final Rule issued by the Centers for Medicare
and Medicaid Services in effect at the time the service was rendered.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraphs (j) to (l) are effective January 1, 2026, or upon federal
approval, whichever is later. The commissioner shall notify the revisor of statutes when
federal approval is obtained.
new text end

Sec. 8.

new text begin [256B.7662] REIMBURSEMENT RATES FOR PRIMARY CARE SERVICES.
new text end

new text begin Subdivision 1. new text end

new text begin Primary care minimum rate. new text end

new text begin Effective for services rendered on or after
January 1, 2026, or the date of federal approval, whichever is later, rates for primary care
services reimbursed under the resource-based relative value scale must be at least equal to
100 percent of the Medicare Physician Fee Schedule.
new text end

new text begin Subd. 2. new text end

new text begin Capitation payments. new text end

new text begin Effective for services rendered on or after January 1,
2026, or the date of federal approval, whichever is later, the commissioner shall increase
capitation payments made to managed care plans and county-based purchasing plans to
reflect the rate increases provided under this section. Managed care plans and county-based
purchasing plans must use the capitation rate increase provided under this subdivision to
increase payment rates to the providers corresponding to the rate increases. The commissioner
must monitor the effect of this rate increase on enrollee access to services under this section.
If for any contract year federal approval is not received for this subdivision, the commissioner
must adjust the capitation rates paid to managed care plans and county-based purchasing
plans for that contract year to reflect the removal of this subdivision. Contracts between
managed care plans and county-based purchasing plans and providers to whom this
subdivision applies must allow recovery of payments from those providers if capitation
rates are adjusted in accordance with this subdivision. Payment recoveries must not exceed
the amount equal to any increase in rates that results from this subdivision.
new text end

new text begin Subd. 3. new text end

new text begin Medicare physician fee schedule. new text end

new text begin For purposes of this section, the applicable
Medicare Physician Fee Schedule is the most recent Medicare Physician Fee Schedule Final
Rule issued by the Centers for Medicare and Medicaid Services in effect at the time the
service was rendered.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Subdivision 3 is effective January 1, 2026, or upon federal
approval, whichever is later. The commissioner shall notify the revisor of statutes when
federal approval is obtained.
new text end

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2024, section 256B.0625, subdivision 38, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2027, or upon federal approval,
whichever is later. The commissioner of human services shall notify the revisor of statutes
when federal approval is obtained.
new text end

APPENDIX

Repealed Minnesota Statutes: 25-02460

256B.0625 COVERED SERVICES.

Subd. 38.

Payments for mental health services.

Payments for mental health services covered under the medical assistance program that are provided by masters-prepared mental health professionals shall be 80 percent of the rate paid to doctoral-prepared professionals. Payments for mental health services covered under the medical assistance program that are provided by masters-prepared mental health professionals employed by community mental health centers shall be 100 percent of the rate paid to doctoral-prepared professionals. Payments for mental health services covered under the medical assistance program that are provided by physician assistants shall be 80.4 percent of the base rate paid to psychiatrists.