HHS Budget Bills Pass House and Senate, Negotiations Continue to Finalize Details

May 15, 2025

The House passed its version of the Health and Human Services (HHS) omnibus budget bill on May 12, and the Senate passed its version two days later. The bills differed greatly, but both bodies were able to come to an agreement on May 15.   

Included in the agreement is the amount to be spent in the HHS area, yet details for the bill have been left to the Senate and House chairs to negotiate.  

Details of the global budget agreement are not yet public, but it is believed that the MMA’s efforts to increase Medical Assistance (MA) payments to 100% of the Medicare level are part of the discussions. Another controversial provision is the agreement to reduce MinnesotaCare coverage for undocumented Minnesotans to children only. This is being strongly opposed by many Democrats in both the House and Senate. 

The House HHS bill (HF 2435) passed earlier in the week is a scaled down version. It provides an increase for hospital inpatient Medical Assistance (MA) payments funded through a tax on hospitals that is recouped through the higher payments. It also provides an increase in funding for ambulance services and for pharmacies in rural and underserved regions. 

It does not include any increase for outpatient MA payments. The MMA’s top priority this session is to raise MA outpatient payments to 100% of the Medicare level. This would be an approximate 30% increase in MA payments. 

The Senate HHS bill (SF 2669) funds many more programs, including three of the MMA’s legislative priorities. It increases outpatient MA payments to 100% of Medicare, and pays for it with additional federal funds that come from an assessment on managed care organizations (MCOs). The way the assessment is structured, the MCOs receive 99% of the assessment back through increased capitation payments.   

The Senate bill also includes the MMA priority of limiting insurers and pharmacy benefit managers from forcing a patient to change medications during the patient’s contract year. If a patient is on a medication that is working and the insurer switches the drugs they cover mid-year, they must let the patient stay on the medication until the end of the contract. 

The third MMA priority is the continued coverage of audio-only telehealth.  Without legislation this year, audio-only coverage is scheduled to end on July 1, 2025. This extended coverage is included in both the Senate and House bills.