Children, Families, Health, & Human Services Interim Committee

Interim Committee Puts Provider Rate Rules on Hold

Committee: Children, Families, Health, & Human Services Interim Committee
Author: Sue O'Connell
Posted on November 9, 2017

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The Children, Families, Health, and Human Services Interim Committee has formally objected to four proposed administrative rules that would have reduced the payments that many health care and human services providers receive for serving low-income or disabled individuals.

The committee had informally objected to the proposed rules in July and September. That action temporarily delayed the adoption of the rules.

The committee's formal objection, made on Nov. 8, prevents the rules from going into effect until after the 2019 Legislature adjourns, unless the committee withdraws its objection or the Department of Public Health and Human Services revises the proposed rules to comply with the committee's concerns.

DPHHS proposed provider rate reductions for Medicaid services and some non-Medicaid services because of budget cuts triggered by Senate Bill 261. That bill contained specific budget cuts for state agencies if state revenues for fiscal year 2017 came in at a lower-than-expected level.

SB 261 required the department to cut $3.5 million a year from provider rates if revenues didn't meet the target levels. That amount was equal to a rate reduction of up to 1%. However, the department said it proposed cuts of 3.47% because of other cuts contained in SB 261 and House Bill 2, the main budget bill.

During a conference call on Nov. 8, the committee members voted 7-1 to formally object to the proposed rules. The committee's objection says that DPHHS did not comply with laws governing the rulemaking process because the agency failed to show a reasonable need for the higher level of rate reductions. The committee also said the Medicaid cuts did not comply with a state law outlining the principles that must be followed when the department seeks to increase or decrease Medicaid services.