Law helps keep HCMC open, sets state in compliance with feds

Key funding to keep open Hennepin County Medical Center, Minnesota’s flagship trauma center and safety net hospital, is included in a health and human services law.

The law also includes provisions to align Minnesota with new federal Medicaid and SNAP requirements included in HR1, also known as the “One Big Beautiful Bill.”

Multiple statutory provisions for the Department of Children, Youth, and Families are also in the law.

Sponsored by Rep. Robert Bierman (DFL-Apple Valley) and Sen. Melissa Wiklund (DFL-Bloomington), the law makes supplemental appropriations to the Department of Human Services; Department of Health; Department of Children, Youth, and Families; and other state agencies. The law appropriates around $50 million in Fiscal Year 2026 and $263 million in Fiscal Year 2027, with most of the funding coming from the General Fund and some from the state government special revenue fund. In Fiscal Years 2028 and 2029, the state will save $5.5 million and $33.6 million respectively. (View the spreadsheet)

HF4466/SF4612*/CH127

Funding for HCMC, governance update

Beset by costs, many for uncompensated care, that had threatened to shut down the state’s busiest Level 1 trauma center, the law will provide a $105 million direct stabilization payment for Hennepin County Medical Center and a $100 million payment toward the nonfederal share of HCMC’s Directed Payment Program.

The law 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. It requires the Hennepin County Board to reconstitute the corporate board of Hennepin Healthcare System by Jan. 15, 2027, and creates a task force to make recommendations related to Hennepin Healthcare’s financing and governance going forward.

By July 15, 2027, the state must transfer $354 million to a hospital stabilization reserve account. Another $146 million must be transferred by July 15, 2028. This section takes effect July 1, 2027.

Money in the hospital stabilization reserve account is available over the next five years for payments to hospitals that are in financial distress and meet other eligibility requirements. An additional $30 million will be provided 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.

Compliance with HR1, federal law

Federal alignment provisions in the law include limits on retroactive Medical Assistance coverage (reduced from three months to one or two months of retroactive coverage), a six-month enrollee redetermination, Medical Assistance cost-sharing requirements for some enrollees and, effective May 28, 2026, creation of a health care eligibility oversight unit tasked with decreasing health care eligibility errors to ensure the state meets federal requirements.

Medical assistance fraud prevention, penalties

Effective Aug. 1, 2026, the law goes after Medicaid fraud by updating penalties and creating new ones whose penalties call for up to 30 years in prison and $1 million in restitution.

Expansion of the Medicaid Fraud Control Unit

The bill grants an additional $1.23 million annually to the Attorney General’s Office to expand its Medicaid Fraud Control Unit.

Supplemental Children and Families budget

The $50 million Fiscal Year 2027 supplemental children and families budget is this law, which allocates $10 million to emergency food support, modernizes childcare and crisis nursery licensing, funds forensic interview training and appropriates funding to counties to administer SNAP benefits.

This also includes childcare center licensing and family childcare licensing modernization, which includes updates to staff orientation and training requirements; behavioral guidance for staff working with children; requirements around children with special healthcare needs or disabilities; required information a facility must provide parents; facility inspection requirements; and maltreatment of minors internal review.

The law also includes policy changes around support for foster youth and families. It includes $15 million for counties working to implement Minnesota African American Family Preservation and Child Welfare Disproportionality Act, which is meant to reduce disparities in the state’s foster care system.

Mental health funding

The law allocates an additional $12.5 million for school-linked behavioral health grants and $3.8 million for mobile crisis grants.

Helping Paws grant

In honor of the late Speaker Emerita Melissa Hortman, the budget includes a $200,000 grant to Helping Paws Inc. The nonprofit breeds, trains and places service dogs with individuals with disabilities and veterans and first responders with PTSD.

SF4612* / HF4466 / CH127