New Jersey Assembly Bill A894

New Jersey 2026-2027 Regular Session

• Introduced: 1/13/26
• Refer: 1/13/26

Caption

Establishes annual cost of living adjustment, based on Consumer Price Index, to base Medicaid per diem rates for assisted living programs; makes appropriation.

Summary

Assembly Bill 894 would require the Division of Medical Assistance and Health Services in the Department of Human Services to increase, at least annually, the base Medicaid per diem reimbursement rates paid to assisted living facilities, comprehensive personal care homes, and assisted living programs. The increase would be a cost-of-living adjustment tied to the Consumer Price Index, using the prior January CPI data to measure inflation over the preceding 12 months, with the adjustment applied each July 1 after the bill takes effect. The bill also directs the Commissioner of Human Services to seek any state plan amendments or federal waivers needed to implement the change and to secure federal Medicaid matching funds. It includes an appropriation from the General Fund for whatever sums are necessary to carry out the act, and it would take effect immediately.

Impact

The bill would amend New Jersey Medicaid reimbursement policy by creating a statutory inflation adjustment for base per diem rates paid to assisted living-related providers serving Medicaid beneficiaries. In practical terms, it would affect assisted living facilities, comprehensive personal care homes, assisted living programs, and the state agency that administers Medicaid payments, while potentially increasing state spending and requiring coordination with federal Medicaid rules. It would also require regulatory implementation by the Department of Human Services and could influence future budget appropriations tied to Medicaid long-term care services.

Sentiment

Based on the bill text and available context, the measure appears to be presented as a support-for-providers bill rather than a controversial policy overhaul. The sponsor’s statement emphasizes inflation, rising operating costs, and the need to preserve reimbursement adequacy for assisted living providers serving Medicaid residents. No committee transcript or recorded votes were provided, so there is no documented opposition or support from hearings or floor action in the supplied materials.

Contention

The main potential point of contention is fiscal: the bill would require annual increases in Medicaid reimbursement rates and an open-ended General Fund appropriation for whatever sums are needed, which could raise state budget concerns. Another possible issue is whether the state can secure federal financial participation and whether the reimbursement formula should be mandatory and automatic rather than subject to annual budget decisions. Providers and advocates for seniors and long-term care are likely to support the bill, while budget officials or fiscal conservatives may question the cost and long-term commitment.