Providers, state officials back H.13 rate-study bill as step toward predictable Medicaid payments

Montpelier — Providers of assisted living, home health, hospice and community behavioral health services told the Vermont Senate Health & Welfare Committee on April 2 that they support H.13, a bill to establish a recurring, data-driven process for reviewing Medicaid rates for residential and community long-term care services.

Felicia Cooper, director of managed care operations for the Department of Vermont Health Access, told the committee that state Medicaid staff "generally speaking, we're in support" of H.13 and that the agency already performs similar work. "I think we have capacity as it stands to do roughly 3 studies per year," Cooper said, noting that doing more studies or at a faster cadence would likely require additional resources.

The bill does not itself appropriate money for rate increases, witnesses said, but would create the information infrastructure for more predictable, transparent decisions on payment levels. "So age 13 really, we believe provides that, that system of predictability and information that's needed," said Molly Dugan of Cathedral Square, which operates affordable and assisted-living communities in northwest Vermont.

Why it matters: providers said current Medicaid rates lag the true cost of care and that predictable, regular rate review could help stabilize staffing and service availability. Testimony documented long wait lists for assisted living and memory-care apartments; Cathedral Square reported 302 people waiting for 30 assisted‑living units and 118 people waiting for 14 memory‑care units, and said roughly 90–100% of residents in those units rely on Medicaid.

Providers emphasized workforce and operating pressures. Amy Johnson of Vermont Care Partners said vacancies are a primary problem: "When people leave, the number 1 reason they leave is wage." Johnson described a network with about 6,000 funded positions and approximately 5,200 filled roles. Other witnesses said personal‑care attendant pay rose about 28% and nursing salaries about 42% from 2019 to 2024, but that those increases still leave providers behind rising costs and health‑insurance expenses.

Home‑health and hospice agencies asked the committee to understand how state rates compare to Medicare equivalents. Jill Mazza Olsen, executive director of VAs of Vermont, said Medicaid payment for skilled home services is about "67% of Medicare," and that many providers are operating at an overall operating loss (survey results cited by her put the network at about a 10% operating loss, with some members reporting higher losses).

Other details and concerns: witnesses urged attention to geographic equity and to the risk that chronically underfunded providers could be undercut if a methodology does not account for baseline shortfalls. Helen Laban of the Vermont Health Care Association said the bill is aimed at assisted community care services and enhanced residential care (ACCS and ERC) and not the separate, more complex nursing‑home rate systems. Speakers also raised non‑rate pressures — for example, providers in the Northeast Kingdom reported driving more than 2,000,000 miles last year to deliver services — and asked the committee to consider transportation and overhead when assessing costs.

Federal uncertainty: committee members and witnesses discussed recent federal developments affecting Medicaid and Medicare policy. Agency staff said they are monitoring possible changes (including actions affecting a Section 1115 Medicaid waiver) and are inventorying what the state could do if federal conditions change. Agency testimony stressed the limits of state levers (population served, services, rates, Medicaid administration) and the fiscal and human impacts of using those levers.

Process and timing: agency staff and multiple providers urged that providers be involved in the methodology for any rate study and suggested the committee consider an auto‑inflator or automatic indexing as an option. Senator Philip Douglas (discussion on the record) proposed adding a welfare‑cliff study (S.99) to H.13 as a non‑substantive addition; AHS agreed to review capacity and timing. Committee staff noted the bill’s report deadline could be moved from the current on‑or‑before Nov. 1, 2025 date to 2026 to allow more time for analysis.

No formal vote was taken in the hearing. Committee staff said they plan quick follow‑up: the bill will be reviewed again with counsel and scheduled for markup.

Ending: Witnesses urged that whatever methodology the committee adopts be transparent, data‑driven and sensitive to geography and baseline underfunding so that the state can better predict and fund the full continuum of long‑term care services in communities.