Legislative Update: Budget Deal Reached

Our legislative rep Dave Renner, CAE, shares an update on the status of Minnesota’s budget bill and the need for a special session.


Governor Tim Walz, Majority Leader Paul Gazelka (R-East Gull Lake) and Speaker of the House Melissa Hortman (DFL- Brooklyn Park) announced a final deal on the state budget targets on May 17, 2021, but a special session will still be needed to complete work on the budget bills.

Knowing that the Legislature would not be able to complete their work before adjournment, the conference committee on the health and human services bill has adopted a scaled-back bill that includes only items with which there is agreement between the House and Senate. Even with an agreement on overall spending levels, there are many issues that still need to be resolved before the final budget bills can be passed. Legislative leaders have directed conference committees to continue working after adjournment and complete their work no later than June 4. A special session will be called no later than June 14.

Key issues important to physicians and patients included in the Health and Human Services budget bill:
  • The bill strengthens current prohibitions on pharmacy benefit managers (PBMs) from prohibiting pharmacists from discussing drug prices with patients. Referred to as “the pharmacy gag clause,” it allows a pharmacist to discuss the cost of a drug with a patient, including what the pharmacist is reimbursed by the PBM.
  • The bill adds to the existing law for drug repositories to allow over-the-counter drugs to be donated. The repository is a way to allow excess drugs to be donated and redistributed to uninsured Minnesotans who cannot afford needed medications.
  • The bill requires health plans credentialing providers to make their decisions on a “clean application” within 45 days. This addresses delays in credentialing that were making it difficult for physicians and other providers from billing health plans.
  • The bill removes a requirement for physicians treating pregnant patients from reporting them to social services if they are using a controlled substance during pregnancy. If the patient is receiving prenatal care, the requirement to report is waived. This is intended to remove a barrier for patients to receive necessary prenatal care.
  • The bill clarifies that organ transplant programs cannot discriminate against a patient based on the person’s mental or physical ability. This is in response to reports that some programs were disqualifying people who had certain conditions, such as Down syndrome, for transplants.
  • The bill modifies the medical cannabis program to allow the use of raw, smokable cannabis. Minnesota is the only state that has a medical cannabis program that does not allow raw leaf. It has resulted in our products being more expensive than other states because of the added cost to process the product into pills or oils.
In addition to deciding the specific health and human services spending levels for the next two years, there are several key issues in the health and human services bill, including:
  • Expanded, ongoing coverage for telehealth and telephone services. There is bipartisan support for continuing coverage for services from a patient’s home and for including audio-only services. Many legislators are questioning whether they should include a sunset for the audio-only coverage in 2023 to force the Legislature to review how it is working.
  • Expanded Medical Assistance (MA) coverage for pregnant persons for postpartum care. Current law only covers 60 days postpartum for some MA enrollees. There is bipartisan support to expand that coverage—the Senate extends it six months; the House extends it 12 months.
  • Limits on drug formulary changes by insurers or pharmacy benefit managers for patients who are experiencing success with a medication. This provision is included in the House bill, but not the Senate. Because enrollees are bound by a contract to remain in the health plan for a year, why should the insurer be able to change the coverage within that health plan during the year?
  • Price transparency for consumers on the cost of services is included in different forms in both bills. The Senate language amends current law that requires a provider or health plan to provide a good faith estimate of the cost of a procedure when asked by the patient. The Senate bill would shorten the timeline to provide the estimate from 10 business days to 5. The House bill creates new requirements for orthopedic, radiology, ophthalmology and anesthesiology clinics to post charges on their website.

The Minnesota Constitution requires the Legislature to pass a balanced, two-year budget before the end of the fiscal year on June 30 to avoid a partial government shutdown. The Constitution also requires the session to end no later than May 17 at midnight this year. This will result in the Legislature needing to return in June for a special session to finish its work.

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