Reduces the appropriation to Medicaid managed care in fiscal year 2025-2026 in order to increase the rates for Medicaid nursing facilities.
Summary
H5986 amends Rhode Island’s Medicaid nursing facility reimbursement law to increase state payments to nursing homes and related long-term care providers. The bill directs the Executive Office of Health and Human Services to review and modify the current cost-based reimbursement system and move toward a price-based methodology that accounts for resident acuity, Medicaid occupancy, direct and indirect care costs, fair-rental value, pass-throughs, and annual inflation adjustments. It also preserves and extends requirements that a substantial share of certain rate increases be used to raise compensation for direct-care workers.
The bill includes a fiscal appropriation for fiscal year 2026 of $33.3 million, split between general revenue and federal Medicaid funds, and states that this money will be used to reduce Medicaid managed care funding and increase nursing facility rates. It also maintains compliance and audit requirements for facilities that receive designated wage-related rate increases, including certifications, possible audits, and clawbacks or penalties if funds are not spent as required. The act would take effect upon passage.
Impact
The bill would amend Rhode Island General Laws § 40-8-19 governing Medicaid reimbursement rates for nursing facilities. Its practical effect is to shift funding within the Medicaid program away from managed care and toward higher nursing facility reimbursement, while reinforcing state oversight of how rate increases are used for worker compensation. Nursing facilities, direct-care staff, Medicaid managed care financing, and the Executive Office of Health and Human Services would all be directly affected.
Sentiment
Based on the bill text and the absence of recorded committee testimony or votes, the overall sentiment appears supportive of nursing facility funding and workforce compensation. The bill’s structure suggests an intent to address long-term care operating costs and staffing pressures by increasing reimbursement and tying part of the increase to wages and benefits for direct-care employees. No contrary views are documented in the provided materials.
Contention
The main policy tension is fiscal: the bill reallocates Medicaid dollars from managed care to nursing facility rates, which could draw concern from managed care stakeholders or budget watchdogs about tradeoffs within the Medicaid program. Another point of contention is the continued requirement that facilities document and prove how rate increases are spent on direct-care compensation, with audits, clawbacks, and penalties for noncompliance. Nursing facilities may support the higher rates but could object to the administrative burden and spending restrictions, while worker advocates would likely favor the wage pass-through provisions.