Item Description:
title
Support Directed Payments Program legislation - offered by Cmsrs Fernando, Lunde, and Conley
end
Resolution:
body
BE IT RESOLVED, that the Hennepin County Board of Commissioners prioritizes the proposed Directed Payments Program legislation (HF2057/SF2413) that would create a statewide Directed Payments Program (DPP), allowing Minnesota to financially secure and reinvest additional federal Medicaid funding to support Minnesota hospitals; and
BE IT FURTHER RESOLVED, that the Hennepin County Board of Commissioners deprioritizes ballpark sales tax legislative proposals in the current session, while maintaining its ability to propose ballpark sales tax legislative proposals in a future legislative session.
end
Background:
Hennepin County works to enhance the health, safety, and quality of life of all residents, envisioning a future where every community is thriving. The County’s vision is placed at ever-increasing risk as healthcare providers in the County and across Minnesota are struggling as reimbursement rates fail to reimburse the true cost of care. These reimbursement rates are most challenging in the Medicaid program, which serves the most vulnerable in society, placing these populations at significant risk and leading to further disparities.
Hennepin Healthcare Systems, Inc. (HHS, Inc.), a subsidiary corporation of Hennepin County, is an integrated system of care including a Level 1 Trauma center, hospital, and clinic system. HHS, Inc. is a major provider within the County that provides care to the most vulnerable, and that works closely with the County to improve resident outcomes. North Memorial is also a critical component of the health care ecosystem in Hennepin County, operating one of the two Level 1 trauma centers in the County. Both HHS, Inc. and North Memorial are experiencing significant challenges with inadequate reimbursement rates.
• Over the last three years, the County has devoted significant time, money, and resources toward the stabilization of North Memorial, including through the provision of direct funding to North Memorial in 2023 to care for the indigent of the County, and supporting North Memorial’s legislative efforts around directed payments legislation that would leverage ballpark sales tax proceeds to benefit North.
• In the 2024 Session, securing Directed Pay Payments for North Memorial was a key objective of the proposed language within the ballpark sales tax legislative proposal; this was enabling language that was contingent upon Federal approval.
Notes regarding HF2057/SF2413:
• Bill has been heard in House and Senate Committees, and list of co-authors continues to grow.
• Formal support from the Minnesota Hospital Association, Hennepin Healthcare, and North Memorial; further, Hennepin Healthcare has estimated a financial benefit of up to $40M.
• Potential to financially secure and reinvest additional federal Medicaid funding as has been done in 40 other states.
• Successful statewide approach will help all hospital systems across Minnesota to address current financial challenges in providing healthcare to our communities.
Timing considerations:
• If signed into law, the proposed Directed Payments Program legislation (HF2057/SF2413) would be effective January 2026, contingent upon Federal approval.
• The current ballpark sales tax will not sunset until all outstanding bonds have been paid in full, and revenues for outstanding financial obligations under the current statutes and lease agreement have been accrued and accounted for, which likely will not occur before the end of 2027. Accordingly, Hennepin County will have multiple future opportunities to revisit potential ballpark sales tax legislation.
• Should both proposals be pursued simultaneously, preliminary analysis indicates that language within the two legislative proposals are in conflict regarding implementation of Directed Pay
recommendation
Recommendation from County Administrator: No Recommendation