Lawmakers hear bill to rebase payments for adult residential care for dementia and brain injury

The House Human Services Committee received testimony on Senate Bill 2271, a proposal that would require the Department of Health and Human Services (DHHS) to collect cost reports from adult residential care facilities and rebase Medicaid payment rates to reflect providers’ actual costs.

Why it matters: Providers and the bill sponsor said adult residential facilities — licensed as basic care and serving people with dementia and acquired brain injury — are a lower-cost alternative to nursing homes but are reimbursed at rates that do not cover current operating costs. Supporters told lawmakers the shortfall forces facilities to raise private-pay rates or discharge Medicaid residents to higher-cost nursing homes.

Senator Sean Cleary, sponsor of the bill, told the committee adult residential facilities are a cost‑effective option compared with skilled nursing but that state reimbursement “doesn’t actually reflect the cost associated with providing the care.” Cleary said the Long Term Care Association’s data show an average cost of about $203…