Committee hears broad support from health and care providers for bill to cover mandated wage increases for contractors; motion to table succeeds

Lawmakers heard extended testimony in favor of House Bill 305, which would require state contracts to include increased reimbursement for contractors and subcontractors when the legislature mandates wage or benefit increases that raise providers’ costs.

Representatives and provider witnesses said the provision is intended to prevent essential care providers — including nursing homes, home- and hospice-care agencies, developmental-disability providers and childcare centers — from being forced to cut services or close when the state raises wages or mandates new benefits without increasing the contract rates paid to those providers.

Vicente Vargas, representing the New Mexico Health Care Association and the New Mexico Center for Assisted Living, said most nursing-facility residents rely on Medicaid and that reimbursement rates have not matched current costs, citing what he characterized as a statewide funding gap for nursing facilities.

Megan Lorino, executive director of the New Mexico Association for Home and Hospice Care, and Jim Copeland of the Association of Developmental Disabilities Community Providers told the committee that increases in wages interact with other employer costs — payroll taxes, workers’ compensation, transportation and compliance costs — and that contract reimbursement has not kept pace. Several speakers urged lawmakers to ensure that providers who serve Medicaid beneficiaries are not left to absorb the increased cost of any mandates.

AFSCME and child-care association representatives also testified in favor, saying that when the state sets the rules it should pay the cost for providers who cannot pass those costs along to payers.

Committee members raised legal and fiscal concerns. The General Services Department’s fiscal-impact notes referenced a possible conflict with the procurement code and identified a potential constitutional issue tied to the state constitution’s debt provisions (Article IX, Section 8). Members questioned whether the statute could create new state liability or uneven advantages in competitive procurements.

Given those unanswered legal and appropriation questions, a motion to table the bill passed on a 6-4 vote. Several legislators said tabling would allow staff to produce more detailed legal and fiscal analysis and to reconcile the bill’s language with procurement and constitutionality concerns.

Ending: Supporters said they will press the bill forward if staff analyses resolve the flagged constitutional and procurement questions; the measure is tabled and may be brought back after further work.