Medical Assistance Legislation Heard in House Committee, Now Moving in Both Chambers

March 6, 2025

Legislation that would increase outpatient Medical Assistance (MA) reimbursement rates to 100% of Medicare continues to move at the Capitol. 

The House Human Services Finance and Policy Committee heard HF1005 (Bierman, DFL – Apple Valley) this week and laid it over for possible inclusion in a future omnibus bill.  

Roli Dwivedi, MD, president of the Minnesota Academy of Family Physicians, testifies in favor of increasing Medical Assistance reimbursement rates.

“Today, about one in four Minnesotans are covered by MA, and more than 40% of babies born in Minnesota are covered by MA,” testified Roli Dwivedi, MD, on behalf of the MMA and the Minnesota Academy of Family Physicians (MAFP). “Unfortunately, there has not been an across the board increase in MA rates in decades. Currently, MA reimburses at about 60 to 70% of Medicare, and only about 30% of what commercial insurers pay. These rates have fallen too far behind, and when rates can’t keep up, services are cut, communities are left without care, and patients suffer as a result.” 

The committee also heard a presentation from the Minnesota Department of Human Services (DHS) regarding a 2024 study recommending reimbursement rates be increased. The DHS study illustrated how far behind reimbursement rates have fallen. The bill’s author, Rep. Robert Bierman, presented the bill alongside co-author Rep. Dave Baker (R – Wilmar), who argued that implementing the DHS recommendation would increase access to care. 

“We know that our system has reached a breaking point,” Bierman said. “Too many children and families are waiting weeks, months or, in some cases, years to access the care they need. When it comes to mental health, more and more of these children end up boarding in a hospital, juvenile detention, or with the county because families have lacked access to early intervention and intensive community-based care. We can fix this access to care crisis by increasing reimbursement rates, while simplifying payment structures and increasing transparency.” 

The legislation is similar to its Senate companion, SF 1402 (Wiklund, DFL – Bloomington). Both bills raise MA rates to at least 100% of the Medicare rate. The House legislation uses a phased-in approach that allocates money from the state’s general fund over three years. The phased-in model prioritizes outpatient physician services initially, with increased rates for community mental and behavioral health in future years. The Senate legislation increases all rates simultaneously and uses funding from a new assessment on managed care organizations (MCOs). This new state money is matched with federal funds to bring in new funds to the program.