The creation of a new Department of Direct Care and Treatment in 2023 was an initiative included in Gov. Walz's proposed budget: "Governor Walz and Lieutenant Governor Flanagan propose separating Direct Care and Treatment, the state-operated behavioral health care system, from the Minnesota Department of Human Services. About 12,000 people with mental illness, developmental disabilities, and substance use disorders receive services each year in DCT programs. Creating a new agency recognizes the different operational needs, regulatory requirements, and areas of expertise between DHS and the direct-care programs. It also erases any perceived or real conflicts of interest connected with being both a regulator and treatment provider."
In 2024 the Legislature enacted Laws of Minnesota 2024, chap. 79, to, according to the House Research Department, "make all the necessary changes to Minnesota Statutes to transfer to the Direct Care and Treatment Executive Board all the duties and authorities currently vested in the commissioner of human services with respect to the activities of the Division of Direct Care and Treatment."
Additional changes were made in 2024. Though initially designated as a "department of the state" in Minn. Stat. 15.01, in 2024 the Legislature removed that designation. That same year, the Legislature defined Direct Care and Treatment as an "agency" for the purposes of Minn. Stat. 10.65 (see Laws of Minnesota 2024, chap. 125, art. 5 and Laws of Minnesota 2024, chap. 127, art. 50).
Laws of Minnesota 2024, chap. 125, art. 5, sec. 41 and Laws of Minnesota 2024, chap. 127, art. 50, sec. 41 provided instruction for the initial appointment of the chief executive officer for Direct Care and Treatment: "The Direct Care and Treatment executive board must appoint as the initial chief executive officer for Direct Care and Treatment under Minnesota Statutes, section 246C.07, the chief executive officer of the direct care and treatment division of the Department of Human Services holding that position at the time the initial appointment is made by the board. The initial appointment of the chief executive officer must be made by the executive board by July 1, 2025. The initial appointment of the chief executive officer is subject to confirmation by the senate."