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Committee amends adult residential payment bill to add operating margin, reporting; passes as amended
Summary
Members amended Senate Bill 2271 on adult residential facility payment rates, debated scope of an operating margin and asset limits, adjusted the appropriation and adopted a do‑pass recommendation 6‑0; providers urged the study to explicitly include adult residential payments and asset‑limit implications for HCBS waivers.
The Senate Human Services Committee took up Senate Bill 2271, an amendment addressing payment rates for adult residential facilities that serve people with memory‑care and other long‑term support needs.
Sarah Acre, executive director of the Division of Medical Services at the Department of Health and Human Services, told the committee the amendment revised earlier language, calculated fiscal impact and added a reporting requirement. Acre said the revised draft adjusted the appropriation to account for a roughly $194,000 difference between calculating an operating margin on direct care only versus applying an operating margin to the full rate. The amendment included a reporting requirement directing the department to report to Legislative Management by Jan. 30, 2026, and Aug. 30, 2026, on progress related to basic care study recommendations.
Provider representatives urged the committee to make the basic care study and adult residential payments an explicit focus. Witnesses described adult residential facilities as cost‑effective settings that provide 24‑hour care at substantially lower cost than nursing facilities but said many providers operate at a loss when serving Medicaid residents. Providers requested that the amendment require a 5% operating margin in the adult residential rate and that the report explicitly address adult residential payment rates. They also urged consideration of the low asset limit that can force premature transitions to nursing homes when residents spend down.
Senators discussed whether to apply the proposed 5% operating margin to direct services only or to the whole rate. Some senators urged caution—saying that if the committee later rebenchmarked rates based on a study and limited margins to direct services, providers could face a subsequent rate reduction. Others argued providers needed immediate help to remain viable and preferred including the operating margin on the full rate.
After discussion the committee amended the bill and the sponsor returned the appropriation to $2,200,000 (as discussed during the hearing). Senator Rohrs moved a do‑pass as amended and to re‑refer to appropriations; Senator Van Osteen seconded. The committee voted 6‑0 to pass the bill as amended (Senator Lee: aye; Senator Weston: aye; Senator Rohrs: aye; Senator Hogan: aye; Senator Van Osteen: aye; Senator Clemens: aye).
Committee members asked the department and providers to continue work on defining the study parameters and noted that additional appropriations or one‑time catch‑up funding could be considered during the appropriation process.
