RELEASE: House passes Health budget agreement saving HCMC, aligning state law with H.R. 1

SAINT PAUL, Minn. – Sunday night, the Minnesota House passed the supplemental Health and Children & Families budget conference committee report on a vote of 108-26. The bipartisan agreement includes funding to save Hennepin County Medical Center and provide financial stability assistance to other hospitals, aligns state health law with H.R. 1, the federal budget reconciliation enacted by President Trump and Republicans last year, and invests $16.3 million in mental health care funding.

“The harmful health care cuts from H.R. 1 will hurt Minnesotans, strain our hospitals, and put coverage at risk for people across our state, including some of the most vulnerable among us. This budget includes steps making Minnesota more resilient to a potential health care crisis resulting from the Trump administration’s sweeping cuts and retribution,” said Rep. Robert Bierman (DFL – Apple Valley), author of the bill and co-chair of the House Health Committee. “I’m proud we reached an agreement to stabilize HCMC and support other hospitals that are hanging on by a thread. The advocacy of leaders like Rep. Esther Agbaje was instrumental in getting a solution to save HCMC, so it can continue to be there for people every day, no matter where they are from, their financial situation, or how big an emergency they’re facing.”

HCMC – a level one trauma center serving the entire region – is on the brink of closure due to dire financial circumstances as a result of health care cuts from the Trump administration and disproportionate levels of uncompensated care. The budget agreement includes a direct $105 million direct stabilization payment for the hospital and a $100 million payment toward the nonfederal share of the Directed Payment Program. The bill transfers $500 million toward a Hospital Stabilization Reserve Account for facilities with a large share of patients enrolled in Medical Assistance or MinnesotaCare, or if it provides a significant amount of uncompensated care. Additionally, the bill also provides $30 million for a new statewide Hospital Stabilization Program to provide financial relief to critical access hospitals, rural emergency hospitals, and hospitals that provide a disproportionate level of uncompensated care.

The bill also updates HCMC governance by requiring 75% of non-county commissioner board members to have expertise in hospital administration, finance, law, business, health equity, or other relevant experience. The bill also requires the Hennepin County Board to reconstitute the corporate board of Hennepin Healthcare System by January 15, 2027, and creates a task force to make recommendations related to the system going forward.

The H.R. 1 alignment provisions in the bill, as it originally passed off the House Floor, are included in the conference committee report. One such measure has “community engagement requirements,” despite a Kaiser Family Foundation study showing 92% of adults on Medicaid under 65 years old and able to work are already working. As a result, H.R. 1 is creating a costly, burdensome paperwork mess both for enrollees and the counties that administer the program, with a huge potential for people losing coverage even though they’re eligible.

Other federal alignment provisions in the budget bill include limits on retroactive coverage, six-month eligibility renewals for certain enrollees, and M.A. cost-sharing for certain adults without children. It invests $3 million over the next three years in the Health Care Eligibility Program Integrity and Oversight Unit aimed at decreasing health care eligibility errors to ensure the state meets federal requirements.

Other key pieces in the package include a boost for mental health funding, with an additional $12.5 million for school-linked behavioral health grants and $3.8 million for mobile crisis grants. The agreement also incorporates $1.23 million annually to expand the Medicaid Fraud Control Unit within the Attorney General’s office, as contained in legislation the House passed Saturday night, authored by Rep. Matt Norris (DFL – Blaine).

Finally, in a move championed by Rep. Bierman to honor Speaker Emerita Melissa Hortman, the budget includes a $200,000 grant to Helping Paws, Inc. Helping Paws is a nationally-recognized nonprofit that breeds, trains, and places service dogs with individuals with disabilities and veterans and first responders with PTSD, and dogs for facilities including courthouses, educational, and mental health settings.

Significantly, the bill does not include a proposal to extend or enforce state law prohibiting payment discrimination in the federal 340B drug program, currently set to sunset July 1, 2027. Despite bipartisan passage in the Senate and co-authorship from 10 House Republicans, conferees did not include the provision.

“In blocking the 340B solution, Republican leaders simply chose to stand with Big Pharma and protect their massive profits rather than protecting the hospitals around the state that are struggling to keep their doors open,” Rep. Bierman said. “This was an incredibly disappointing outcome, and considering the bipartisan support this measure had, the GOP will have plenty of questions to answer about why they didn’t allow it to cross the finish line.”

A spreadsheet of the investments in the bill is available here. Video of Rep. Bierman's closing comments is available here.