The 2025 Human Services budget bill (HF 3, 1st Special Session) and the Human Services policy bill (HF 2115) include targeted spending to support the direct care workforce, policies that improve and increase access to care and services, and budget adjustments that stabilize future growth.
The Senate DFL ensured that spending adjustments were distributed equally across provider types, pushing back against highly paid industry operators who demanded that home and community-based services be targeted. The budget is person-centered, meaning decisions were intentionally made to protect direct care for people accessing services. This was achieved by strengthening program integrity measures and maintaining rates within projected inflation growth.
Nursing facility workers and home care workers will benefit from increases in reimbursement rates. Additional funding will help the state manage a complex hospital medical system 24/7, 365 days a year. This will reduce the time people spend languishing in jails or hospitals while waiting for treatment. Families are supported through expanded respite services. Children diagnosed with Autism Spectrum Disorder will be able to access swimming lessons as part of their disability services programming. Lastly, the backlog to access Medicaid services is addressed by upgrading the approval process.
The bills also protect the historic investments in human services passed by the Senate DFL in 2023. The Nursing Home Workforce Standards Board will be able to continue its mission, parental fees were not reinstated, asset limits and eligibility requirements for accessing Medicaid were not added, and more.
This balanced approach, which protects care and services for Minnesotans while stabilizing the budget, is essential at a time when Republicans in Congress are planning to gut Medicaid funding to pay for tax cuts for the wealthy.
For details on program integrity, see the general “anti-fraud” section
Nursing Facilities – Providing More Federal Funding, Increasing Worker Wages, & Building a Sustainable Medicaid Funding System
The human services budget bill includes $220 million in net savings to the state related to nursing facilities. This includes:
• Nursing facility rate increases.
• The nursing facility surcharge increase (which is logged as a savings for the state but captures more federal funding for nursing facilities).
• Reforms to the reimbursement system that result in a decrease in state spending.
Nursing facility rate increases
The human services budget bill increases nursing facility rates for two reasons:
• Help neutralize the impact of the nursing facility surcharge increase.
• Increase wages for nursing home workers.
Staff wages for nursing facility workers remained stagnant before DFLers established the Nursing Home Workforce Standards Board in 2023. Due to the Board’s efforts, the state will spend nearly double the previous estimate to ensure that minimum wages are increased for nursing home workers. Modifications to the Nursing Home Workforce Standards Board statutes will provide upfront funding to help nursing homes implement the new wage rule.
Increasing the nursing facility surcharge
The Senate DFL accepted the bipartisan House provision to increase the surcharge, allowing nursing facilities to capture more federal matching dollars. This funding mechanism is often referred to as a provider tax, is logged as a savings for the state, and will require federal approval.
Reforms to the reimbursement system
Since 2017, rates for nursing facilities in Minnesota have increased by 100%. However, evidence shows that the quality of care has not improved. The 2025 bipartisan human services bill makes necessary reforms to the nursing facility reimbursement system (VBR). It establishes a uniform inflation growth standard and ties it to a common reference factor, with an annual growth rate not to exceed 4%.
New program integrity measures will prevent nursing homes from being paid twice by the state for empty beds and will ensure nursing home property rates are tied to the value of the building (which incentivizes investments in infrastructure).
Disability Services – Budgeting for Stability in Advance of Republican Cuts to Medicaid
In 2023, the DFL trifecta passed historic legislation to increase Disability Waiver Reimbursement System (DWRS) rates and the Competitive Workforce Factor (CWF). DWRS is a methodology used by the state to reimburse care provider businesses for services offered in community-based settings and for overhead costs incurred. The state is continually refining the DWRS formula to strike the right balance between supporting businesses that provide Medicaid services and accountability measures for how taxpayer funds are used.
The 2025 human services bill modifies the DWRS formula to utilize a common reference factor (CPI-U), aligning growth with inflation up to a 4% increase.
- These changes will encourage stable growth in spending for disability services without removing people from waiver services.
- Modifying the formula for reimbursing provider businesses resulted in a $186 million spending reduction over the next biennium, and it is also projected to capture $480 million in savings for the state in fiscal years 2028 and 2029.
Program integrity within disability services programs was also strengthened.
- These measures will ensure that reimbursement rates for high-needs individuals are used for their direct care, that skills training hours are not abused, and that certain overnight direct care staff are paid appropriately.
- These accountability changes result in $97 million in reduced spending in FY 26/27 and $196 million in savings in FY 28/29.
The Senate DFL demanded that any changes in this budget area avoid eliminating services, capping enrollment, or reducing asset or income requirements.
That demand was successfully carried through, and the 2025 human services budget bill does not contain any provisions that would remove care from Minnesotans. Unfortunately, all those might now be a possibility if Republicans in Congress make cuts to Medicaid.
Long-Term Services and Supports Advisory Task Force
A 30-member task force, comprising advocates, human services business operators, legislators, and industry experts, is tasked with advising and assisting the legislature and the governor in reducing cost growth in long-term services and supports. In addition to determining where to cut spending, the Task Force will work on recommendations on how to build greater efficiencies and achieve better outcomes for Minnesotans accessing services.
By July 1, 2027, the Task Force’s recommendations must be agreed upon and passed by the legislature, signed into law by the governor, and reduce spending by $284 million within the human services budget. If the legislature fails to do so, the law requires automatic cuts in disability services reimbursement rates by $132 million and increases in county cost shifts by $134 million in FY 28/29.
The 48-Hour Rule and the Department of Direct Care & Treatment
The 2025 Human Services budget bill ensures that the Department of Direct Care and Treatment has the necessary resources and properly trained staff to manage a statewide hospital system with medically complex patients. Funding for this agency was a top priority for county sheriffs, county attorneys, mental health advocates, hospitals, and county social services workers.
The Senate DFL also prioritized the recommendations from the Priority Admissions Review Panel, which is a multidisciplinary team of experts working collaboratively to address the overlap between the criminal justice system and treatment provided through the Direct Care and Treatment agency.
The following budget provisions were passed into law to help the Review Panel continue its work:
- $55 million in the bonding bill to build a locked facility in Anoka County with 50 additional beds for patients who are civilly committed and need treatment.
- $34 million for operational costs to maintain and run the new facility.
- $20 million to begin demolition, site prep, and construction of the new facility.
Critical policy provisions were also passed because of the Priority Admissions Review Panel recommendations:
- The modified “48-hour rule” was temporarily extended until June 30, 2027. The temporary law requires DCT to admit a patient who is in jail and civilly committed to state-operated services within 48 hours of a medically appropriate bed becoming available.
- DCT must publish a publicly accessible dashboard of its referral data on its website by January 1, 2026, and update it quarterly.
- The continuation of the exception of 10 people from community hospitals to be admitted to a DCT bed until June 30, 2027.
- Extending the Priority Admissions Review Panel, next report due February 1, 2026.
Protecting People Accessing Long-Term Care Services & Supports
Strengthening the rights of residents in long-term services and supports (LTSS) is critical now more than ever, due to the impending Republican Medicaid cuts.
Corporations that rely on Medicaid funding can be quick to make business decisions that prioritize profit over the health and well-being of residents under their care. That is why the Senate DFL passed laws in advance of the Republican Medicaid cuts to ensure that safety is the law.
Protections for Assisted Living Facility Residents:
- Facilities can’t terminate a contract based on a resident changing payment types, such as moving from a private payment source to a public source.
- Effective January 1, 2026, facilities must honor an existing contract if ownership of the facility changes (SF 2522 Mann).
- Assisted living facilities are prohibited from requiring residents to sign an agreement for binding arbitration as a condition of admission or as a requirement to continue to receive care (SF 1918 Dibble).
Protections for People Accessing Disability Services in the Community:
- Disability services providers are prohibited from requiring guardianship or conservatorship as a condition for providing care (SF 2522 Mann).
- Case managers must annually complete an informed choice curriculum and pass a competency evaluation on informed decision-making standards.
Strengthening the Hospice Care Bill of Rights (SF 1918 Dibble):
- Hospice patients have the right to have the appropriate medication readily available for pain and symptom management.
- Individuals can revoke hospice election at any time.
- Any individual can receive curative treatment for any condition unrelated to the condition that qualified the individual for hospice, while remaining on hospice election.
Improving Disability Services & Helping Minnesotans Access Care
Waiver Reimagine – Task Force, Budget Additions, & Online Tool
A multidisciplinary group of Task Force members must meet at least quarterly and gather input from the public on the Waiver Reimagine project.
The Waiver Reimagine project aims to consolidate Minnesota’s four disability waivers into two, but the process has been met with intense backlash from disability advocates. The report is due January 1, 2027, and must outline any concerns identified by the Task Force. DHS is also required to submit its final Waiver Reimagine plan to the Task Force by December 15, 2026.
DHS must also develop a process to support access to home care nursing services for the new project. By July 1, 2026, the DHS must develop an online support planning and tracking tool to help individuals accessing waiver services view their budget and the services available to them.
Ensuring Children Most at Risk of Drowning Access Swim Lessons (SF 3040 Mohamed)
Drowning is the leading cause of death for children and adults with autism. Following the deaths due to drowning of two boys with autism from the Somali community in 2024, disability advocates and the Council on American-Islamic Relations urged lawmakers to take this health disparity seriously. The Senate DFL listened and ensured that children under 12 years old, who are most at risk of drowning, can access swimming lessons as part of their disability service programs.
Same Day Disability Determinations (SF 1175 Boldon)
DHS must establish a process within the State Medical Review Team (SMRT) for applicants in high-risk categories to expedite disability determinations. Examples include people waiting to be discharged who require HCBS and/or children under two years old diagnosed with a rare disease.
Expediating Disability Determinations – An Essential Part of Accessing Medicaid
The annual requirement for people to obtain approval or be reassessed for long-term care often disrupts or delays care, as workforce shortages and inefficient administrative systems create long wait times. The Senate DFL prioritized access to Medicaid and enacted policy changes to streamline and build efficiencies into the process, opening the door to care for many Minnesotans. Those changes include:
- Adults over 21 and under 65, within certain requirements, can attest to no changes in needs in services in place of going through a lengthy assessment process.
- Remote reassessments may be substituted for four consecutive reassessments (instead of two) if followed by an in-person reassessment.
- Hospitals can contract with lead agencies for disability determinations to help people languishing in hospitals get services in the community.
- New policies that authorize the sharing between Medicaid providers and SMRT teams of health records data and the acceptance of electronic signatures will support efficient and accurate disability determinations.
- Modified professional qualifications for MnCHOICES assessors will expand the workforce.
Supporting Family Caregivers
The state saves millions of dollars each year due to the tireless work of family caregivers. Not only does it save money, but paying and supporting family caregivers helps their loved ones connect and thrive within their community. The 2025 Human Services budget bill appropriates funding and enacts policy changes to ensure family caregivers can continue their essential work.
- A parent can be paid to provide PCA/CFSS services to a minor child while traveling temporarily out of state.
- New policy changes will help expand access to out-of-home respite care services for children. This will help caregivers rest while knowing their child is safely taken care of by licensed providers.
Investing in the Caregiving Workforce
Investing in Home Care Professionals (SF 2640 Maye Quade)
Senate DFLers secured wage and benefit increases for over 35,000 direct care workers by passing the SEIU bargaining agreement into law. Funding this two-year contract will benefit all workers across the state, as it will establish a standard for all provider agencies to meet in recruiting and retaining workers.
Building on the historic rate increases in 2023 for Personal Care Assistants (PCAs) – now transitioning into Community First Services & Supports (CFSS) – the 2025 Human Services budget bill appropriates $125 million over four years to ensure home care workers have a livable wage, incentives for training, and the ability to plan for their future. Additionally, funding this contract increases the enhanced rates from 7.5% to 12.5% to ensure participants with medically complex needs have reliable access to care and that workers are properly paid for their additional services.
The agreement includes funding for stipends, a statewide matching system that would connect workers with individuals needing services, and a study on health care coverage for workers. Lastly, the state begins the process of creating a retirement trust for home care workers.
Increasing Wages for Nursing Home Workers
In 2023, DFLers established the Nursing Home Workforce Standards Board(NHWSB) to ensure nursing home workers have a seat at the table when it comes to making decisions regarding their professional careers.
In 2024, the Board implemented new wage standards, understanding that workers with livable wages and strong benefits strengthen the quality of care for residents in nursing homes.
Due to the DFL’s commitment to labor, the 2025 Senate DFL’s provision to fund the wage standards with $52 million over four years was passed into law. Nursing facility workers will get the following pay raises:
- An industry-wide minimum wage of $19.00 per hour will be implemented for all nursing home workers starting in 2026.
- The general wage floor will increase to $20.50 in 2027.
- There are higher minimum wages for Certified Nursing Assistants ($22.50/$24), Trained Medication Aides ($23.50/$25), and Licensed Practical Nurses ($27/$28.50).
NHWSB Industry pushback
Unfortunately, nursing facility industry operators pushed back against establishing a living wage for their workforce by advocating to end the Nursing Home Workforce Standards Board. Republicans took the lead on the industry’s work to dismantle the Board at the risk of the health and well-being of residents in facilities. However, Senate DFLers collaborated with nursing home industry leaders to ensure that new wage floor standards are implemented with rate increases earlier than usual, helping them to adjust budgeting forecasts for business operations.
Ultimately, Senate DFLers were successful in protecting another historic win in 2023. The Nursing Home Workforce Standards Board continues its mission and many nursing home workers across the state will receive higher pay as a result.
Building a Strong Medicaid Substance Use Disorder Treatment Workforce
Medicaid covers half of substance use disorder treatments in Minnesota. An estimated 450,000 to 500,000 Minnesotans are directly impacted by addictions across the entire state. The Senate DFL made targeted investments in the 2025 Human Services Budget to ensure SUD treatment providers accepting patients enrolled in Medicaid can continue their essential work.
The bill increases low-intensity SUD residential services and treatment coordination to 100% of the modeled rates and high-risk services to 83% of the modeled rates, with annual adjustments for inflation. Modeled rates are from the 2024 DHS rate study.
Expanding the SUD Workforce – Study & Qualification Updates
The Human Services bill expands the list of qualified professionals who can administer the comprehensive assessment for licensed SUD treatment facilities. It also directs DHS to conduct a study and develop recommendations to eliminate barriers to licensed health professionals’ ability to provide SUD treatment services. The report is due January 15, 2027.
Providing Flexibility & Relief for Businesses in the Human Services Industry
Many of the policy changes that added flexibility and helped businesses manage their operations were requested by industry leaders. In advance of Republican cuts to Medicaid, Senate DFL members listened and passed legislation to ensure that businesses relying on Medicaid funds can continue to serve Minnesotans.
- Businesses that receive revenue from Medicaid will not have to meet compensation standards for their direct care workers until 2029.
- DHS is required to consult with provider agencies on guidelines for disability rate exceptions.
- New laws will help assisted living facility operators provide regular comprehensive assessments for residents. The law clarifies the ability of licensed practical nurses to participate in the preparation of the assessments.
- Modifications to the 2019 assisted living facility licensure law will provide facilities greater flexibility and authority to address health and/or safety concerns of residents. Consumer advocates collaborated with industry leaders to find a compromise that did not risk the rights of residents in the facilities.
Substance Use Disorder Treatment and Behavioral Health
The Human Services bill addresses the rising complexity of behavioral health cases and the increasing use of substances by Minnesotans across the state. The mental health continuum of care will be enhanced by policy changes that expand services, protect patients from financial harm for seeking care, and facilitate caregivers’ access to mental health services.
Helping People Access SUD Treatment & Crisis Services Without Financial Harm
- Courts are prohibited from ordering people to pay the cost of substance use disorder assessments after a DUI conviction if the cost can be covered by Medical Assistance or through the Behavioral Health Fund.
- Counties can’t charge people for emergency services related to emotional crises or mental illnesses, including calls to 988. Deductibles and copays also do not apply to these services.
- People on probation or parole can access certain mental health, chemical health, or detoxification services.
Helping Parents Access SUD Treatment & Mental Health Services
- SUD providers offering child care while parents are seeking treatment in the same building will have an alternate route for child care licensure, with more flexibility appropriate to their unique situation. However, the person providing child care must still be trained in CPR and first aid.
- Family supports are added to allowable grant activities for the school-linked behavioral health grant. This will help caregivers access the necessary mental health services, which will ultimately benefit their children.
Locked Facility Planning (SF 1479 Maye Quade)
Experts working in children’s mental health and hospitals advocated for legislation that would help address the complex issue of children boarding in hospitals.
$100,000 is allocated for planning of a locked psychiatric residential treatment facility (PRTF) operated by DCT, with a report due by March 1, 2026. PRTFs provide active treatment to children and youth under age 21 with complex mental health conditions. This will help the state ensure that more options exist across the spectrum of mental health care for children.
Free Communications for People in State-Operated Facilities (SF 666 Oumou Verbeten)
In 2023, the legislature mandated that all phone calls from Department of Corrections (DOC) facilities for incarcerated individuals be free of charge. A bill passed in 2024 did the same for people accessing treatment in state-operated facilities. In 2025, the provision was extended by another year, and $753,000 was appropriated to ensure that free communications for people in DHS/DCT facilities remain available until June 30, 2027.
Did Not Pass:
Several provisions related to Medicaid transparency and ensuring the quality of care for long-term careresidents in facilities did not pass due to opposition from Republicans and the industry. Unfortunately, thefollowing provisions were not passed despite Senate DFL and consumer advocates’ strong support:
- Reforming the Medicaid reimbursement system for nursing facilities by connecting reimbursement rates to quality of care reports.
- Affidavit and transparency requirements, direct care expenditure guidelines, and enforcement regarding private equity/for-profit change of ownership of facilities.
- Prohibiting LTC facilities from imposing guardianship/conservatorship requirements as a condition ofreceiving care and services in a facility.
- Protections and guidelines regarding the use of restraints in assisted living facilities.
Many of the Governor’s budget recommendations regarding county cost-shifts and spending reductions werenot passed into law. Provisions not accepted by the Senate DFL include:
- Several DWRS interaction changes (absence utilization factor, 351 billing days, etc.).
- 2% inflation cap on disability services and nursing facilities.
- Eligibility changes to CADI/BI waivers.
- 5% county share for residential services.
- Reinstating TEFRA parental fees for household incomes above 675% FPL.