Committee approves H.13 to set Medicaid payment methodology for home- and community-based providers

The House Health Committee on Monday approved draft 4.1 of H.13, a bill that directs the Secretary of Human Services to establish a methodology for determining Medicaid payment rates for providers of home- and community-based services rather than creating those details through rulemaking. The committee voted to approve the draft by roll call; no no votes were recorded.

Jennifer Carbridge of the Office of Legislative Counsel briefed the committee on the changes to H.13, saying the latest draft moves rate-setting mechanics out of rulemaking and places a statutory requirement that "the Secretary of Human Services establish a methodology" for determining payment rates. Carbridge said the methodology language lists specific requirements the agency must address, including a schedule for rate studies, a predictable timeline for redetermination of base rates, and a process for annual inflationary adjustments.

The bill requires the Agency of Human Services (AHS) to provide a report to the House Health Committee and the Senate Health and Welfare Committee by Jan. 15, 2026, updating the committees on implementation of the new section. That report must include the agency's proposed schedule for Medicaid rate studies and the methodology it has developed for determining payment rates for home- and community-based service providers.

Committee discussion focused on several drafting and implementation details. Members asked Carbridge whether the definition of "home and community-based services" should exclude settings with rates already established under other statutory sections; Carbridge and lawmakers debated avoiding circular language that would remove services from the bill's coverage once new rates are set. A committee member said, "We're not gonna disrupt anything that exists in existing rules," reflecting concern that the change should not unintentionally override existing rate arrangements.

Other elements Carbridge said are in the bill: rate studies must be scheduled at least once every five years for each provider type; the methodology should, "to the extent permitted by the Centers for Medicare and Medicaid Services," take into account the financial needs of providers affected by client absences; and the Secretary must establish a process by which a provider whose financial condition places it at imminent risk of closure may seek extraordinary financial relief from the agency. The draft also references labor market rates and costs of operation as factors for consideration.

Committee members requested clarification about how the draft links Title 18 and Title 33 statutory provisions; Carbridge explained the change places the new rate-setting provisions in one title and references it from the other to avoid parallel, duplicative provisions. Members also discussed whether to prescribe payment on an enrollment basis versus attendance basis; Carbridge said prescribing one specific mechanism in statute would be too limiting and that the methodology should allow multiple approaches.

The committee approved the motion to adopt draft 4.1 of H.13. The clerk conducted a roll-call vote; Representatives Bishop, Cole, Donahue, Estes, Garfano, McGuire, McGill, Nielsen, Noyes, Steady and Wood were recorded voting yes. The draft was described as taking effect on passage; the bill text as amended removed references to rulemaking and combined previously separate references to designated and specialized service agencies under the home- and community-based services umbrella.

Members and counsel noted several drafting points remain to be resolved as the bill moves to the floor, including clearer language on which services remain covered once the new section is operationalized and how to define "home or community setting" in cases where agency and statutory usage differ. Carbridge said she would refine the language and consult with AHS staff as the bill proceeds.

The committee also inserted a standard reporting signature block into the amendment form and indicated a clean, final copy (4.1) would be prepared for the clerk and for the record.