Providers urge larger inflationary increases, guardianship funding and specialty ICF licensure as Senate reviews HB1012

Chairman Deaver and members of the Senate Appropriations Human Resources Division heard more than a dozen provider, family and consumer witnesses urging expanded funding and program changes in House Bill 1012 during a multi-hour public input session.

Representatives of developmental disability providers, corporate guardianship services, residential intermediate care facilities and home- and community-based providers asked lawmakers for larger inflationary increases than those approved in the House, targeted appropriations to reduce waiting lists and administrative changes to make high-acuity care financially sustainable.

Why it matters: HB1012 contains the Department of Health and Human Services executive budget lines for developmental disability services, corporate guardianship, intermediate care facilities (ICFs) and related home- and community-based services. Witnesses said current reimbursement levels and unfunded administrative requirements are forcing turnover, limiting capacity and threatening specialized programs that serve medically complex children and adults.

Providers pressed for a larger ‘‘inflator’’ than the amounts already included in the House budget. Angela Denias, executive director of the North Dakota Association of Community Providers, told the committee, “We are doing what matters for people who matter,” and asked the panel to support a 4% increase in year one and 3% in year two to match recent federal inflation trends. Denias said the current payment system was designed to be self-sustaining only if inflationary adjustments keep pace with federal inflation rates and warned that payment shortfalls limit providers’ ability to offer competitive wages.

Multiple witnesses described workforce pressures. Sargi Anowitski, Lehi operations officer for Community Options, said there are more than 5,000 direct support professionals (DSPs) in the state but reported a statewide DSP turnover rate of about 41% and a residential turnover rate of 45%. She and other witnesses told senators that low reimbursement constrains providers’ ability to raise wages and retain staff; the transcript includes figures cited by witnesses that an ICF reimbursement design supported an average direct-support-professional wage of $17.96 per hour while providers were paying an average $20.81 per hour in practice.

Several providers testified about specific funding and program requests that are part of or linked to HB1012. Ann Carlson, which operates ICFs and residential habilitation programs, told the committee it has run operating losses and is pursuing both a licensure change and interim appropriations. Tim Eisinger, president and CEO of Ann Carlson, said the organization and the department favor adding a specialty hospital license to some ICF beds to allow a reimbursement method that better reflects medical acuity. “Our best option at this point is to add a specialty hospital license to the existing ICF,” Eisinger said. He also asked the committee to consider a bridging appropriation: $2.2 million per year (about $4.4 million for the upcoming biennium) to cover projected operating losses while the licensure change is implemented. Eisinger also referenced a House-placed appropriation of $3.45 million that he said addressed part of prior losses.

Catholic Charities’ corporate guardianship program asked lawmakers to fund additional guardianship slots tied to the DD budget in HB1012. Donna Bezewski, program director for Catholic Charities’ corporate guardianship, said the program is the ‘‘guardian of last resort’’ for adults with intellectual disabilities and that the charity receives referrals only through DD program managers. Bezewski said the guardianship program had a waiting list of 148 people as of the day before her testimony and that the bill’s funding for 71 additional slots would ‘‘cut the waiting list in half’’ and substantially reduce backlog if included.

Advocates urged accreditation be voluntary or funded. Several provider witnesses supported making external accreditation voluntary or paid for by the state. Denias and other providers said mandating an unfunded accreditation requirement diverts scarce resources from direct care.

Family advocates and consumers described how Medicaid-funded services affect daily life. Kendra Vanderwall, executive director of Designer Jeans of North Dakota, and parent Micah Stockland gave instances where early intervention and waiver services made measurable differences for children with developmental disabilities. Stockland said Medicaid ‘‘stepped in and changed everything’’ for her family after a NICU stay and that state and Medicaid supports allowed her child to access needed therapies and remain in community settings.

Witnesses from home- and community-based care and senior nutrition programs asked the committee to preserve or increase reimbursements in HB1012. Roger Reich, executive director of the Minot Commission on Aging, described the Senior Nutrition Program and asked the committee to continue state funding that helps federal Title III meal funds reach the state’s rural meal sites; he cited program goals of unit reimbursement targets lawmakers have discussed: about $7.62 per congregate meal and $8.89 per home-delivered meal, versus an estimated total meal cost the witness gave for 2024. Home care providers such as Erin Sorensen, owner of a Home Instead franchise, urged support for increased Medicaid reimbursement so agencies can recruit and retain caregivers who often travel long rural distances.

Long-term care and nursing facility leaders also testified. Nikki Wagner, president of the North Dakota Long Term Care Association, described the nursing facility quality incentive program created in the state’s payment reform and noted $12 million in new funding was secured in 2023 for that program. Wagner and nursing facility administrators asked the committee to direct the Department of Health and Human Services to treat the incentive dollars as new funding and not convert them to a withhold that facilities must ‘‘earn back,’’ warning that a withhold could harm facilities already operating on thin reserves.

Behavioral health infrastructure also surfaced in testimony. Joel Larson, general counsel for Altru Health System in Grand Forks, described a ‘‘phase 2’’ plan to add 24 inpatient behavioral-health beds adjacent to Altru’s recently opened hospital. Larson said the project has been developed to allow additional incremental expansion and that the House included an amendment to HB1012 (section 6 of the house draft) requesting $16.2 million in state support for the phase-2 construction. He said the site already hosts a 24-bed phase-1 unit and that Altru has spent about $17 million to open the initial behavioral-health unit.

Committee members asked witnesses for follow-up detail on capacity, how appropriations would be used, and the timeline for proposed licensure or program changes. Multiple witnesses said administrative work with the department is ongoing and that some changes (for example, the Ann Carlson ICF-to-specialty hospital licensing change) could be implemented through administrative rule rather than new legislation, while appropriation requests would support bridging losses or accelerate implementation.

No formal committee votes or motions were recorded during the public input portion of the hearing; senators asked questions and sought clarifying detail for later deliberations.

Ending: Witnesses asked senators to consider the human and fiscal effects of current Medicaid rates and program design as the committee evaluates HB1012. Several asked the committee to prioritize workforce supports, targeted appropriations to reduce wait lists and measures that make specialized medical care financially workable in-state so services remain available across rural and urban communities.