Committee revisits Medicaid case‑management rate parity; department and advocates differ on scope

Sen. Kevin Nabard (prime sponsor) presented Senate Bill 135, which would direct the Department of Health and Human Services to annually establish Medicaid rates for state‑plan case management services and create parity among the same or similar services.

Caroline (Carolyn/Caroline in transcript) Virtue and other case‑management advocates told the committee parity is required by the Centers for Medicare & Medicaid Services (CMS) and by state direction, and that current reimbursement for Choices for Independence (CFI) case management is far below comparable rates for other targeted populations. Virtue said the department's July 2024 rate study benchmarked certain rates against themselves instead of against comparable services, and that the CFI case management rate was set without a recognized case‑management rate‑setting paradigm.

Advocates presented a chart showing variation across case management rates: example figures included a CFI rate (quoted as $301 in testimony handouts), mental‑health case‑management rates higher than the CFI rate, and a supportive‑housing waiver rate that was set more recently. They argued federal guidance treats case management as the same Medicaid medical service regardless of target population and that benchmarking should compare similar services.

Department officials — including Henry Littman, Medicaid director, and Melissa Hardy, division director for long‑term supports and services — said the department supports parity in principle and implemented a code‑for‑code parity approach following HB2 (2023). Littman said the agency's interpretation of parity in 2023 was that like billing codes should carry like rates, with a limited exception for community mental‑health centers where the legislature directed a different treatment. He acknowledged that some stakeholders view parity more broadly (to include administrative components captured in the designated area agency administrative claiming—DA D S—rate) and said the department is willing to continue discussions to reconcile views and, if necessary, to produce an updated fiscal analysis showing the appropriation needed to achieve broader parity.

Committee members pressed for clarity about what parity means in practice: code‑for‑code (department position) versus a broader accounting for comparably performing services including administrative components (advocates' position). Department staff said transitioning to a cost‑report or similar provider cost basis for some services could help create durable parity but would be a larger project requiring time and, in some cases, federal approval. The department agreed to follow up with additional financial options and a revised fiscal note.

Why it matters: Advocates say lack of parity leaves important case‑management programs underfunded, undermining services for people with disabilities and the elderly; the department told the committee it implemented parity consistent with recent legislative direction but acknowledged unresolved questions in how the area‑agency administrative functions are treated and what approach should form the permanent methodology.

Next steps: Department officials committed to ongoing conversations with stakeholders and to providing additional fiscal detail to the committee.