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Providers tell legislators low Medicaid rates threaten access to PT, OT and SLP services
Summary
Representative Ed Buttrey told the Senate Business and Labor Committee House Bill 585 would set Medicaid reimbursement for PTs, OTs and SLPs by multiplying a conversion factor by relative value units and include a possible CPI index for future years.
Representative Ed Buttrey introduced House Bill 585 to the Senate Business and Labor Committee as a proposal to change Medicaid reimbursement for physical therapists (PT), occupational therapists (OT) and speech‑language pathologists (SLP). The bill uses conversion factors multiplied by relative value units to set rates and includes an optional inflation adjustment tied to the Consumer Price Index for later years.
Buttrey said the professions were excluded from a 2022 rate study that reset other Medicaid provider categories and that the current fees do not cover labor and overhead. “When a physical therapist sees a patient, they lose about $44 an hour,” he said; testimony cited losses of roughly $44 for PT, $51 for OT and $68 for SLP per hour on Medicaid patients.
Dozens of clinicians, clinic owners and professional association leaders testified in favor. Emily Herndon, president of the American Physical Therapy Association–Montana and a private‑practice owner, said nearly half of PTs work in small businesses and many practices subsidize Medicaid care to keep doors open. “This isn’t fair,” she told lawmakers. Clinic owners said low payment rates force them to limit the number of Medicaid patients and, in some cases, consider closing or refusing Medicaid altogether.
Opposition testimony came from the Department of Public Health and Human Services, which said in written and oral testimony that the bill’s proposed automatic inflation step (applying CPI to the conversion factor) could produce larger-than-expected expenditure growth because the conversion factor interacts with RVUs and other schedule elements. Mary Lemieux, the department’s health‑resources administrator, recommended alternative approaches and said the department would work with sponsors on language.
Committee members pressed sponsors and the department on options, including removing the inflationary clause or applying an aggregate change instead of indexing the conversion factor alone. The sponsor said he would work with the department and is open to removing the CPI adjustment; the department agreed to quick follow‑up work on potential language and fiscal estimates.
No committee vote was recorded at the hearing. Sponsors and many providers urged a ‘due pass’ while the department requested time to model budget impacts and alternative rate‑setting language.
Why it matters: providers said raising rates is necessary to preserve access to rehabilitation and developmental services in rural communities; the department warned about fiscal consequences if increases are applied without careful modeling and asked to negotiate alternative indexing approaches.
