MMA Priority Legislation on MA Reimbursement Rates Moves Through Another Committee

April 3, 2025

Legislation that would increase community mental health and outpatient Medical Assistance (MA) reimbursement rates to Medicare levels, per a 2024 recommendation from the Minnesota Department of Human Services (DHS), was heard April 1 in the Senate Taxes Committee.  

The bill was heard in the tax committee because it proposes a new managed care surcharge used to maximize federal funds to pay for the increase. The proposal (SF 1402, Wiklund, DFL – Bloomington) is intended to minimize impact on MCOs by reimbursing 99% of their assessment through increased MA payments.  

The Minnesota Council of Health Plans (MCHP) and the Minnesota Chamber of Commerce oppose the assessment, arguing it will raise commercial rates. Models show the proposed MCO assessment raises $748 million, of which $1.7 million across all plans is not paid back.  

Proponents of the bill include a broad coalition of physician specialty societies, health systems, mental health advocacy organizations, patient advocacy groups, healthcare access advocacy groups, and other healthcare provider groups. These groups have argued that with more and more Minnesotans relying on MA for coverage, it is now more important than ever to increase these rates and ensure those in every corner of the state have access to care.  

At the hearing, committee members asked about the availability of federal matching funds to finance the increase. Thus far, the Centers for Medicare and Medicaid Services (CMS) has made these funds available to states who apply for the waiver. The reimbursement increase is contingent of federal approval of that waiver.  

SF 1402 was re-referred to the Senate Health and Human Services Committee, to be included in a future omnibus bill.