Nearly $17 billion human services finance bill clears House

Cuts to Medical Assistance and nursing facilities but more funds for direct care and treatment are all in the mixture of a human services bill.

Sponsored by Rep. Mohamud Noor (DFL-Mpls), SSHF3 was passed 96-37 by the House at Monday’s special session. Later passed 35-32 by the Senate, the bill with a $16.8 billion price tag awaits a Gov. Tim Walz signature.

“This bill had the largest budget reduction of $1.1 billion for the next two bienniums,” said Noor, co-chair of the House Human Services Finance and Policy Committee. “… In this bill, we created a process whereby we looked to the shared sacrifice and also minimized the harm of reducing any programs in the Department of Human Services.”

The bill would cut $270 million from the human services budget for the 2026-27 biennium.

“(It) is a product of compromise,” said Rep. Joe Schomacker (R-Luverne), a committee co-chair. “Some things in here we all can agree to but may not necessarily agree with.”

[MORE: View bill, summary table, spreadsheet]

Medical Assistance would take the biggest hit as the bill would cut long-term care waivers by $275 million. Most of that would come by capping the Disability Waiver Rate System at an annual rate of 4% of the Consumer Price Index, a $186.1 million savings in the next biennium. Another $52 million would be saved with long-term care waiver rate exceptions.

Other cuts include $57 million to the nursing facility surcharge, $41 million for changes to the nursing facility payment system, $23 million to a daily hour cap on individualized home supports with training services, $23 million to the night supervision service asleep rate, $16.7 million to inpatient competency attainment exam liability, and $15.4 million for waiver authorization reform.

[MORE: Legislators finalize $16.8 billion human services budget deal]

But it wasn’t all cost-cutting as Direct Care and Treatment would receive an additional $70 million, with $33.75 million going for operation adjustments, $20 million to the Minnesota Sex Offender Program, $15 million for mental health and substance abuse, and $14 million for forensic services.

The bill would also increase funding for workers with $70 million for the Self-Directed Worker Bargaining agreement and $18 million for Nursing Home Workforce Standards Board.

Other provisions in the bill include:

• providing a Jan. 1, 2026 effective date for nursing facility consolidation rates;
• establishing an advisory task force to advise the Legislature and governor on ways to reduce cost growth in long-term services;
• requiring the Direct Care and Treatment executive board to publish a referrals and admissions dashboard on its website;
• establishing a priority admissions review panel;
• requiring immediate approval of a limited exception for up to 10 civilly committed patients per year in hospital settings to be added to the Direct Care and Treatment admissions wait list, until June 30, 2027; and
• changing terminology from “emotional disturbance” to “mental illness” throughout Minnesota statutes.