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Legislature boosted Medicaid funding by billions; committee questions oversight and outcomes

June 27, 2025 | Legislative Health & Human Services, Interim, Committees, Legislative, New Mexico


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Legislature boosted Medicaid funding by billions; committee questions oversight and outcomes
Eric Chignee, Legislative Finance Committee analyst for the Health Care Authority, told the Legislative Health & Human Services committee that the Legislature approved multiyear increases in Medicaid provider rates and one-time funding this session.

"We've done about $2,300,000,000 — that's 'b' with a billion — dollars in Medicaid provider rate adjustments," Chignee said, and he added that the session included roughly $735,000,000 in nonrecurring appropriations for health-related programs.

The report presented by Chignee emphasized scale and the need for oversight. "Medicaid is everywhere in the state," he said, noting that the most recent enrollment projections put the program at about 814,000 enrollees and that federal Medicaid revenue to the state is roughly $9 billion. Chignee also said the Health Care Authority will receive about $15 billion in federal funding from all sources and about $2.1 billion in general fund support in the coming year.

Why this matters: Committee members repeatedly pressed staff about whether higher spending will produce better outcomes. Chignee told legislators the Legislature has substantially increased provider rates, one-time investments and recurring supports in recent years, but said the body must follow implementation and performance data to know whether the spending improves access, health outcomes or system capacity.

Key facts presented

- Total recent provider rate adjustments across Medicaid programs: about $2.3 billion (all fund sources).

- Nonrecurring appropriations cited in the post-session review: about $735 million for health-system items intended largely for capacity building and startup costs.

- Latest enrollment cited by LFC at the meeting: about 814,000 Medicaid enrollees; LFC noted earlier, higher pandemic-era counts approached 1 million and that enrollment has fallen since emergency-related limits on disenrollment ended.

- LFC cited a blended federal medical assistance percentage (FMAP) in recent years around 77.71%; small FMAP shifts can have large budgetary effects.

Concerns and discussion points

- Enrollment and projections: Chignee warned that differences between projected and actual enrollment can tie up general fund dollars unnecessarily. He cited months in which departmental projections exceeded actual enrollment by tens of millions of dollars per month, a variance the committee said needs closer monitoring.

- Performance measurement: multiple committee members said the state must match the new funding with reliable data, regular performance monitoring and program evaluations to verify outcomes over time.

- Reversions and trust funds: legislators asked for clarification about the Medicaid trust fund language, specifically which reversion amounts or interest flows were to be retained in the trust versus returned to the general fund; Chignee said he would double-check legislative language.

What the committee directed and next steps

- LFC staff advised the committee that oversight will require more precise enrollment and spending projections and routine performance reporting from agencies implementing the new appropriations.

- Legislators asked LFC and agency staff for follow-up work to clarify the Medicaid trust fund mechanics and to track whether federal policy changes affect enrollment or matching rates.

Ending

Committee members left the briefing with a shared emphasis on oversight: staff must track spending, enrollments and outcomes as agencies implement the session's appropriations. LFC said it will continue to provide quarterly performance measures and targeted evaluations so the Legislature can assess whether the larger investments translate into improved access and outcomes.

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