Legislation signed into law this month is changing the way Ridgeview Medical Center in Waconia can use 20 of its licensed hospital beds, clearing the way for the hospital to treat more medical and surgical patients.

Since 1984, Minnesota has placed a moratorium on adding new hospital beds due to concern that growing the supply of health care services will inevitably drive up cost.

In Ridgeview’s case, the hospital already had a license for the 20 beds in question, but they were designated for patients needing rehabilitation services and were not in use. The new law, which was signed by Gov. Tim Walz about a week ago, lets the medical center use the beds for a different purpose — namely, medical and surgical patients.

“We’ve had to transfer over 300 patients over the last 24 months … because of a lack of medical and surgical beds,” said Mike Phelps, the chief executive at Ridgeview Medical Center, in an interview.

“We were allocated 20 new beds in the 2003 legislation, but they had restrictions around what they could be used for,” Phelps said. The new law “removed those restrictions.”

The Minnesota Hospital Association said the bill wasn’t opposed by other hospitals as it moved through the Legislature during the session that concluded this month. Last year, lawmakers granted an exception to the moratorium for more beds at Regions Hospital in St. Paul despite concerns the expansion could pull patients from nearby St. Joseph’s Hospital.

The Regions proposal went through a review by the state Health Department to determine whether it was in the public interest. No such review was needed for the Ridgeview proposal, state officials said, because the moratorium exception had already been granted. The new law constitutes an amendment to an existing moratorium exception, state officials said, rather than a new request that would have triggered a review.

Ridgeview Medical Center is located in fast-growing Carver County at the southwest edge of the Twin Cities metro area. In 2017, the hospital reported income of about $3.1 million on revenue of $251.3 million, according to a regulatory filing.

Over the last 10 years, Ridgeview has expanded outpatient services including a free-standing emergency department that’s part of a development in Chaska called Two Twelve Medical Center. With more than 2,200 employees overall, Ridgeview operates 13 primary-care clinics.

In 2014, Ridgeview took control of a small hospital in Arlington and then in 2017 assumed operation of a small hospital in Le Sueur.

Currently, Ridgeview Medical Center operates 109 inpatient medical and surgical beds. The new law will expand the count to 129 beds, but it’s not clear exactly when that will happen or what hospitals services will be added or expanded.

“We will begin the process of evaluating the best-use case to serve the needs of the community,” said Phelps, the hospital CEO.