Public health, hospitals warn grant terminations and CMS actions put services at risk

ST. PAUL, Minn. — Local public health officials and hospital representatives told a Senate committee that recent federal actions — including notices to terminate CDC grants and CMS statements about possible withholds — threaten staff positions, core public health programs and hospital finances.

Nick Kelly, director of public health for Bloomington, said the public health infrastructure grant supports roughly 200 local staff across Minnesota and that some of that work has been sustained only because a court temporarily paused grant terminations through March 12, 2026. "Losing it means losing ground every year, forcing local taxpayers to absorb cost and accept reduced service," Kelly said.

Hospital representatives emphasized rising uncompensated care. The Minnesota Hospital Association reported charity care rose 40% in 2024 to $342,000,000 and estimated additional uncompensated care tied to coverage losses could add hundreds of millions more. The association also noted uncertainty about whether the state's directed payment program and the Rural Health Transformation Program (RHTP) will be approved or implementable under new CMS guidance.

Several witnesses urged that state leaders prioritize immediate IT modernization, confirm which grants can be recovered with federal corrective action, and consider state-level mitigation funding to preserve essential public health and hospital services.