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Senate subcommittee hears plan to modernize psychiatric residential treatment facility rates; no final action
Summary
Committee discussed SB2399, which would update PRTF rate setting—allowing some parent travel and home‑pass costs, increasing an administrative cap and moving toward value‑based purchasing. Department and providers outlined a timeline for rule changes and new rates in January 2026; committee did not vote.
The committee took testimony at length on SB2399, a bill proposing changes to reimbursement for psychiatric residential treatment facilities (PRTFs). The sponsor was not present; Tim Ganger of Dakota Boys and Girls Ranch, a PRTF provider, described the changes in the committee amendment and urged adoption.
Ganger said the amendment is aimed at modernizing an antiquated rate‑setting process that had not kept pace with changes in program operations and accreditation. The amendment would allow PRTFs to include certain costs—such as parent travel if not recoverable elsewhere—and to claim days when a child is on a supervised home pass, noting facilities continue to provide therapy and crisis care during those home visits. He also asked that the administrative cap — currently 15% of allowable costs — be raised to better reflect overhead and compliance costs. Finally, the amendment encourages DHHS and providers to move toward value‑based purchasing in the future.
Department staff said the department is working with providers on administrative rule changes and asked the committee to permit rulemaking aimed at an October timeline so new rates could be calculated and submitted to medical services by the end of the year. If rules are updated on that schedule, the department said new rates could take effect January 1, 2026 and the next biennial fiscal impact would show a larger increase than the current biennium. Committee staff noted the provider estimate of the next‑biennium impact was about $1 million in state general fund cost (before federal match) but that the exact fiscal note would be prepared in the budget process.
Committee members asked operational questions: the state currently licenses six PRTFs; some providers operate multiple campuses. Lawmakers discussed whether the department could make adjustments administratively versus requiring a bill and whether appropriation in the budget or statutory language was the correct vehicle for a rate change. No vote was taken in subcommittee on SB2399; members requested more time to review the amendment and the department's updated fiscal estimates.
