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HF 5130

Calculation of border city nursing facility rate adjustments clarified.

2025-2026 Regular Session Introduced by Heather Keeler

Calculates a border-city nonprofit nursing facility rate add-on as the difference between the adjacent-state/neighboring city benchmark payment rate (lowest case mix) and the facil

Introduction and first reading, referred to Human Services Finance and Policy
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Bill Summary · HF 5130

Summary of HF5130 (Session 2025-2026) – Calculation of border city nursing facility rate adjustments clarified

Purpose and intent

  • The bill amends Minnesota Statutes to clarify and codify how rate add-ons are calculated for certain border city nonprofit nursing facilities.
  • Specifically, it addresses how the “external fixed costs” rate adjustments are determined for facilities located in Breckenridge, Moorhead, or nearby border-adjacent areas, aligning the process with state rate-setting practices and ensuring an explicit method for computing add-ons.

Key provisions and changes

  • Section amended: Minnesota Statutes 2024, section 256R.481, Rate Adjustments for Border City Facilities.

  • Eligibility and applicability

    • Nonprofit nursing facilities located within the boundaries of Breckenridge or Moorhead (as of before January 1, 2015) may apply, once annually, for a rate add-on to their external fixed costs payment rate.
    • Facilities must apply annually to receive the add-on.
    • Applications must be submitted within 60 calendar days of the effective date of any add-on, with a possible waiver by the commissioner in extraordinary circumstances.
    • The commissioner must provide the add-on to each eligible facility that applies by the deadline.

  • Calculation of the add-on (the substantive change)

    • The add-on is defined as the difference between:
    • The median total payment rate for the lowest applicable case mix classification in effect for nonprofit facilities located in an adjacent city in another state or in cities contiguous to that adjacent city, and
    • The eligible nursing facility’s total payment rate for the lowest case mix classification in effect, as determined under section 256R.22, subdivision 4.
    • In other words, the add-on brings the facility’s rate closer to the benchmark set by comparable facilities in adjacent cross-border or neighboring cities, specifically referencing the lowest case mix classification to establish the gap.

  • Effective date

    • The new calculation method is retroactive to January 1, 2026.
    • It applies to rate years beginning on or after January 1, 2026.

Who is affected

  • Eligible nonprofit nursing facilities located in Breckenridge or Moorhead (pre-2015 boundaries) that participate in Minnesota’s rate-setting for external fixed costs.
  • The Minnesota Department of Human Services (the commissioner) administering the rate-add-on program and enforcing application timelines, waivers, and calculations.

Procedural and timeline considerations

  • Application cycle: Facilities must annually apply for the add-on, with a clear deadline set 60 days after the effective date of any add-on, though the commissioner can grant waivers in extraordinary circumstances.
  • Retroactive effectiveness: Policy is effective starting January 1, 2026, with applicability to rate years beginning on or after that date.
  • Administrative implementation: RequiresCalculation consistent with the benchmark of adjacent-border facilities in another state or contiguous cities, using the lowest case mix classification as the reference point.

Potential impact

  • For eligible border-city nonprofit facilities, the add-on could narrow the rate gap to comparable facilities across borders, potentially improving financial alignment with neighboring jurisdictions.
  • The retroactive start date provides a pathway to adjust rates for the 2026 rate years and beyond, subject to annual applications and computations.
  • Administrative clarity reduces ambiguity in calculating the add-on, subject to the specified benchmark and case mix classification framework.

If you’d like, I can provide a plain-language example illustrating how the add-on would be computed for a hypothetical facility using concrete numbers.

Compiled from official sources — confirm details with the bill’s official record.

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