Provider Tax Included in Senate Omnibus Bill, Heard in Taxes Committee

April 24, 2025

The Senate health and human services omnibus bill, which includes several of the MMA’s legislative priorities, was heard in the Taxes Committee on April 23.  It also includes an increase in the provider tax from 1.8% to 2%. 

The 565-page bill, SF 2669 (Wiklund, DFL – Bloomington), was referred to the Taxes Committee because it includes a number of tax provisions, including the provider tax increase. 

“As part of the budget building process, we had to take into account the budget target given to us with the many needs and fiscal uncertainty we have heard about in the last few months,” said Sen. Melissa Wiklund, the bill’s author. “This bill includes a restoration of the provider tax to its original and longstanding level of 2%. This change represents just a .2 cents per dollar, but its impact is significant.” 

The MMA opposes the provider tax increase, arguing in a letter that it “is one of the most regressive taxes” and “adds to the overall cost of healthcare.” The letter also stressed that the tax disproportionately burdens smaller practices, making it difficult for them to sustain operations in an already challenging healthcare environment and narrowing patient access to essential medical services, especially in rural and traditionally underserved communities. Other provider groups, including the Minnesota Hospital Association, the Minnesota Dental Association, and the Minnesota Pharmacists Association, oppose the provider tax increase. 

The omnibus bill also includes MMA legislative priorities: 

• increasing Medicaid Assistance (MA) reimbursement rates for outpatient physician services to 100% of Medicare; 

• prohibiting insurance companies and pharmacy benefit managers from forcing patients to change medications mid-year; 

• allocating $250,000 in one-time funding for the Treat Yourself First campaign, a multi-disciplinary campaign to reduce the stigma of getting help and encouraging Minesota’s healthcare workforce to get care if they need it; and 

• extending coverage for audio-only telehealth services for three more years, at a cost of $18.8 million over that period. 

The Taxes Committee referred the bill to the Finance Committee – the final committee stop before the bill reaches the Senate floor. The House has yet to release details of its omnibus bill.