Appropriations committee caps PRTF therapeutic-leave payments at $500 per day; department to authorize days

The House Appropriations Committee — Human Resources Division voted 6 to 2 to set a $500 daily payment for therapeutic leave days under Senate Bill 2,399 and directed the Department of Health and Human Services to authorize how many leave days a given individual may use.

The vote came after hours of committee questions about how Medicaid PRTF (psychiatric residential treatment facility) per diem rates are calculated and how paying for therapeutic leave days would affect facility reimbursement and the state fiscal note. Committee members discussed alternatives including a flat fee, a percentage of the Medicaid average, tiered rates tied to occupancy, or leaving the bill unchanged. Sarah Acre, Executive Director of the Division of Medical Services at the North Dakota Department of Health and Human Services, told the committee the fiscal note was drafted assuming the full Medicaid rate would be paid for therapeutic leave days under the bill as introduced.

The committee’s action reduces the fiscal exposure compared with paying full rates. Acre said the fiscal note for the 2025-27 biennium included roughly $1,000,053.69 in general funds and $2,774,653.00 in federal funds for the proposal and that the motion to set a $500 flat daily amount would cut the fiscal note by about $680,000 in the current estimate.

Why it matters: PRTFs provide inpatient psychiatric services for children and adolescents. The committee’s change affects how providers are reimbursed when a resident is temporarily away from the facility for family visits or therapeutic leave and therefore affects program costs, provider revenue, and the state general fund and Medicaid expenditures.

Committee debate focused on three main questions: whether the state should pay full Medicaid per diems for days when the child is not physically in the bed, how existing rate methodology accounts for occupancy and fixed costs, and whether a cap or authorization process should control use of therapeutic leave days. Representative Murphy highlighted rate disparities between providers; Sarah Acre explained that per diem rates reflect each facility’s reported costs and occupancy in the prior year. Representative Steeman proposed the $500 flat daily rate as an interim measure; Representative Murphy seconded the subsequent motion that combined the $500 cap with a requirement that the department authorize days for each individual.

Acre told the committee that paying full rates for leave days would increase costs relative to current practice and that the department did not include the proposal in the governor’s budget: “This is not in the governor’s budget,” she said. She also told members the department could return with a breakdown of which portions of provider rates are property and indirect costs and could model alternate percentages (for example, 75% or 50%) if the committee asked for that analysis.

The committee also discussed administrative controls as an alternative to a statutory cap. Acre recommended an authorization process—requiring facilities to request leave days for each child—so the department could review clinical appropriateness and family engagement rather than enact a hard statutory cap that would limit flexibility.

The committee recorded its roll call on the motion to set a $500 daily cap and authorize the department to administer the number of leave days per month: Chairman Nelson — Yes; Vice Chairman Stevens — Yes; Representative Anderson — No; Representative Berg — Yes; Representative Metzkog — Yes; Representative Murphy — Yes; Representative O’Brien — Yes; Representative Wagner — No. The motion passed 6 to 2.

What the committee directed next: the department was asked to draft statutory language to implement a $500 daily cap and an authorization process for leave days and to provide follow-up information if requested, including any recommended caps or percentage-based alternatives and data on how many therapeutic or hospital leave days have been used to date.

Budget and funding notes: Committee discussion identified that Medicaid pays the per diems and that the federal share is significant; committee members cited the fiscal-note figures Acre provided and a committee estimate that the $500 motion would reduce the fiscal exposure on the fiscal note by roughly $680,000. Acre said the fiscal note figure covers only the 18 months of the 2025-27 biennium used in that calculation and that the full 2027-29 biennium exposure would be larger.

Closing: The committee approved the $500-per-day approach as an interim, compromise measure and sent the bill forward with the committee’s recommendation and directive that department staff produce implementing language and additional analysis for the conference or full committee as needed.