SF3671

Purpose

• The bill changes how Minnesota handles federal money used for medical assistance (MA). It allows the state to adjust payments to providers so that the state does not lose federal funding (federal financial participation, FFP) when payments would otherwise exceed Medicare limits. It also creates a trigger that, if FFP is temporarily withheld or discontinued for a covered MA service, the service could be removed from MA coverage for enrollees starting on a specified date.

Main Provisions

• Section added to Minnesota Statutes 2024, 256B.0642, titled “FEDERAL FINANCIAL PARTICIPATION.”
  • a) The commissioner may, in aggregate and in advance, reduce payment rates to MA providers that receive federal funds in order to avoid reductions in federal financial participation caused by MA payment rates that exceed Medicare limitations.
  • b) If FFP is temporarily withheld or discontinued for a covered MA service, the service is no longer available to MA enrollees as of the date of the withhold or discontinuance (effective June 1, 2026). The commissioner is prohibited from making payments to MA providers for services delivered on or after that date.

Effects on Existing Law

• Introduces a new mechanism to adjust provider payment rates to shield federal funding levels (FFP) from being reduced by MA payment rates that exceed Medicare caps.
• Creates a trigger where a covered MA service can be removed from coverage for enrollees if FFP is temporarily withheld or discontinued, with a concrete date (June 1, 2026) and a prohibition on payments for services after that date.

Effective Date and Scope

• Effective June 1, 2026, for the specific situation where FFP is temporarily withheld or discontinued for a covered service.
• Applies to medical assistance programs in Minnesota and to MA providers receiving federal funds.

Practical Implications

• For the state: allows upfront reduction of MA payment rates to preserve federal funding.
• For MA enrollees: potential loss of access to a covered service if federal funding is paused, effective on the date of the FFP withhold or discontinuance.
• For providers: payments may be reduced or halted for certain services if FFP is withheld or discontinued.

Note on Terms

• Key terms used in or implied by the bill: federal financial participation (FFP), medical assistance (MA), covered service, medical assistance providers, commissioner, temporary withhold, discontinuance, Medicare limitations.

Relevant Terms

• FFP (federal financial participation)
• medical assistance (MA)
• MA enrollees
• medical assistance providers
• covered service
• temporary withhold
• discontinuance
• Medicare limitations
• Commissioner
• Minnesota Statutes 2024 section 256B.0642
• June 1, 2026