Interim committee asks staff to send letter after hearing that DD waiver provider rates, capacity remain short

The Legislative Health & Human Services interim committee approved a letter questioning how the Department of Health (and related agencies) implemented recent appropriations for direct‑support provider rates under the Developmental Disabilities (DD) waiver and asking officials to explain why the department has not sought federal matching funds.

Madam Chair Thompson described the committee’s intent: legislators expected recent appropriations to increase rates for direct‑support professionals so providers could recruit and retain staff. She said department staff have taken the appropriations to reflect funding for prior‑year rate changes rather than a new, ongoing rate increase and that the department has not sought a Centers for Medicare & Medicaid Services (CMS) amendment that would allow federal matching funds for higher rates.

Chair Thompson summarized the problem and the committee’s concern: "Our intent was that raises bring the direct service providers up to a level where we can compete with the lowest paid jobs that there are." She said lawmakers had appropriated $20,000,000 in a prior session for provider rate increases, but that implementation was delayed and treated as retroactive rather than forward‑looking.

Public comment included provider‑sector advocates who described persistent capacity shortfalls. Provider advocate Robert Cagle told the committee that many counties lack supported‑living providers and that earlier rate studies and contract changes created an illegal classification problem that reduced pay for front‑line workers. “We are grossly out of compliance with federal law, and we’re denying these people service,” Cagle said during public comment.

Bruce Wetherbee, an investigative reporter who publishes analysis of DD waiver implementation, urged the committee to seek presentations from the Economic Development Department and Department of Workforce Solutions to align workforce development with health‑care workforce needs and to examine the misclassification of workers as independent contractors.

The committee’s Vice Chair, Senator Linda Lopez, moved to send the letter asking for clarification from the Department of Health and other agencies about whether they will seek CMS approval for matching funds and to explain the timeline and use of the appropriated dollars. Representative Eleanor Chavez seconded the motion. The committee approved sending the letter (no roll call recorded in the transcript); staff will prepare and transmit it.

Committee members asked staff and Legislative Finance Committee analysts to prepare written material and briefings for future interim meetings so legislators can monitor implementation rather than rely solely on testimony at session.

The committee also set follow‑up tasks to request provider capacity data by county and to seek LFC analysis of payments, provider counts and any DOL (U.S. Department of Labor) investigations referenced in public comment.