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 per resident per day versus average state reimbursement near $162 per day. He said the bill would require facilities to submit cost reports by Oct. 31, with recalculation of rates effective Jan. 1, 2026, and another round of rebasing to begin July 1, 2027.

Provider testimony: Nikki Wagner, president of the North Dakota Long Term Care Association, said the facilities have existed for decades but were not always recognized in state code, which contributed to funding gaps. Wagner cited department data showing an average operating cost around $212 per day and an average paid rate near $166 — a roughly $46 per-resident daily shortfall. She said the shortfall is driven largely by staffing and regulatory costs and that rebasing would stabilize providers who deliver 24‑hour specialized memory-care services.

Lana Sharvitt, administrator of Maple View Memory Care Community in Bismarck, described local experience: Maple View operates several facilities with Medicaid and private-pay residents and she said the share of Medicaid residents has grown, creating situations where residents “spend down” and become unable to pay room-and-board fees. Sharvitt said keeping residents in adult residential care can be substantially less expensive for Medicaid than placement in skilled nursing; she cited a 2024 average skilled nursing rate of $403.19 per day.

Fiscal estimate and scope: Senator Cleary told lawmakers the bill would affect roughly 16 facilities and estimated an initial cost of about $1.7 million general fund and $1.7 million federal funds to align reimbursements with reported costs. Witnesses said a rebasing in 2019 had been helpful and argued for another rebasing to reflect rising costs.

What the bill would do: The measure would define adult residential facility language in statute, require cost reporting and instruct DHHS to recalculate provider rates based on submitted costs with phased implementation through 2027. Supporters said this would reduce pressure to shift costs to private-pay residents and help facilities recruit and retain staff.

Next steps: The committee closed the hearing on Senate Bill 2271; no committee vote was recorded in the hearing transcript.

Speakers quoted or referenced in this article: Senator Sean Cleary, Nikki Wagner (North Dakota Long Term Care Association), Lana Sharvitt (Maple View Memory Care Community), Chairman Ruby.

Clarifying details: {"facilities_count":"~16 facilities (sponsor estimate)","estimated_budgetary_impact":"$1.7M general fund and $1.7M federal funds (sponsor estimate)","average_cost_per_day_provider_data":"$203 per resident per day (Long Term Care Association cited)","department_cost_comparison":"$212 per day (department slide) vs average paid rate $166 per day (department slide), ≈$46/day shortfall","skilled_nursing_avg_2024":"$403.19 per day (testimony)"}

Proper names: North Dakota Long Term Care Association; Maple View Memory Care Community; Department of Health and Human Services (DHHS).

Community relevance: Statewide but concentrated on facilities and families that care for residents with dementia or acquired brain injury; fiscal impact on Medicaid and private-pay residents.