SF5047

Purpose

• Create two new financial relief programs to help providers that have unusually high amounts of uncompensated care: hospitals and community-based safety net providers.
• Give the state health department authority to set rules and distribute funds to these providers based on specific criteria.

Main Provisions

• Hospital Uncompensated Care Relief Program

  • Who qualifies: Hospitals in Minnesota that are licensed and file a Medicare cost report in the state, and that provide services to people who are uninsured or not enrolled in Medical Assistance (MA) or MinnesotaCare or Medicare, with no other health coverage.
  • What counts as an uncompensated episode: Services paid under MA methods for a single patient encounter where the patient is uninsured or ineligible for MA/MinnesotaCare/Medicare and has no other coverage, and where total reimbursement would be between $5,000 and $50,000.
  • How payments work: The commissioner determines each qualifying hospital’s share of the total value of eligible uncompensated episodes in a reporting period and distributes payments proportionally. No hospital can receive more than 10% of that period’s funds. If funds remain after the cap, the leftover are redistributed to other qualifying hospitals in proportion to their shares.
  • Reporting and documentation: Hospitals must submit documentation proving qualifying uncompensated episodes within defined reporting periods (January 1–June 30 and July 1–December 31). Deadlines are Sept 15 for the first period and March 15 of the following year for the second period. Documentation must meet the commissioner's specified form and supporting materials.
  • Adjustments: The commissioner can create rules to handle corrections, late submissions, or reconciliations in a future period.

• Community-Based Safety Net Provider Uncompensated Care Relief Program

  • Who qualifies: Federally Qualified Health Centers, certified Community Behavioral Health Clinics, and Community Mental Health Centers that meet program definitions.
  • What counts as an uncompensated episode: Similar concept as hospitals, but for these providers, with an eligibility threshold of between $200 and $2,000 per episode.
  • How payments work: The commissioner distributes funds proportionally based on each provider’s share of total qualifying uncompensated episodes, with a 10% cap per period and redistribution of any remaining funds to providers not yet at the cap, in proportion to their shares.
  • Reporting and documentation: Providers must submit documentation within the same two periodic windows (Jan 1–June 30 and Jul 1–Dec 31) and by the same deadlines (Sept 15 and March 15 of the next year), using the commissioner's required forms and providing supporting documents as requested.
  • Adjustments: Rules may be adopted to address corrected claims or late submissions for a future period.

• Administration and Rulemaking

  • The commissioner of health is given authority to establish procedures by rulemaking to reconcile adjustments, corrected claims, or late submissions in a subsequent reporting period.

Changes to Existing Law and Fiscal Implications

• Rural EMS Uncompensated Care Pool
  • The bill updates a separate rural EMS uncompensated care pool payment program in fiscal years 2026 and 2027, with specific appropriation amounts and ongoing availability through June 30, 2029. It also notes base funding levels for 2028–2031.
• General Fund and Health Care Access Fund
  • Provides new appropriations from the general fund (in fiscal year 2027) for both the hospital uncompensated care relief program and the community-based safety net provider uncompensated care relief program.
  • Specifies related funding bases for the general fund and Health Care Access Fund through 2031.

Significance and Impact

• Aims to reduce financial strain on providers that bear a disproportionate share of unpaid care by distributing funds based on demonstrated need (uncompensated episodes) and maintaining caps to spread funds more broadly.
• Creates formal processes for reporting, validation, and distribution to ensure transparent and timely disbursement.
• Introduces rulemaking authority to adjust for corrections and late submissions to maintain accuracy over time.

Implementation Notes

• Payments are allocated and distributed within two semi-annual reporting periods.
• Deadlines and caps are designed to balance fairness (proportional distribution) with fiscal discipline (10% cap per provider per period and redistribution of excess funds).

Relevant changes to administrative rules and reporting are anticipated, with ongoing oversight by the Minnesota Department of Health.

Relevant Terms - hospital uncompensated care relief program - qualifying hospital - qualifying uncompensated episode of care - medical assistance (MA) - MinnesotaCare - Medicare - reporting period - documentation - commissioner of health - proportional distribution - payment cap (10%) - redistribution - rulemaking - community-based safety net provider uncompensated care relief program - federally qualified health center (FQHC) - certified community behavioral health clinic (CCBHC) - community mental health center (CMHC) - qualifying community-based safety net provider - unreimbursed/uncompensated care - rural EMS uncompensated care pool - appropriation (general fund, Health Care Access Fund)