Gov. Mark Dayton this week signed legislation that grants Regions Hospital in St. Paul licenses for 55 new hospital beds.

The new law specifies that 15 beds are to be used for inpatient mental health, and 40 beds for other services. In addition, five unlicensed beds for mental health patients with short-term needs are to be added at Regions.

Since the 1980s, Minnesota has had a moratorium that blocks new bed licenses due to concerns that added health care capacity drives up costs. The Legislature can grant exceptions.

Under the new law, hospitals seeking an exception to the moratorium must submit plans to the state Health Department no later than Aug. 1 of the calendar year prior to the year when the Legislature will consider the request.

The Health Department reviews requests for more beds to see if the plans are in the public interest, but in the case of the Regions plan they didn't have time to issue a final report during the legislative session.

It's relatively unusual for lawmakers to grant new beds for medical and surgical patients, while exceptions for mental health beds have been more common.

Regions initially asked for 100 beds, but competing health systems raised concerns about the plan given trends that are moving many types of patient care outside hospitals. In it's preliminary report, the Health Department said the full 100-bed proposal was not in the public interest, but suggested a smaller expansion might serve the public.

In the end, Bloomington-based HealthPartners, which operates Regions, came to an agreement on 55 new beds that was supported by Allina Health System and Fairview Health Services. Each health system is based in Minneapolis and includes a large hospital near Regions in St. Paul.

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