Providers urge H.13 to require annual Medicaid rate reviews for home and community‑based care, warn workforce at risk

Providers that deliver home and community‑based services told the House Human Services Committee they strongly support H.13, a bill that would require the secretary of human services to determine reasonable and adequate Medicaid payment rates for home and community‑based providers. Witnesses said annual rate studies and inflation adjustments are needed to address long‑running underfunding, staffing shortages and program closures.

Mary Hayden, executive director of the Vermont Association of Area Agencies on Aging, told lawmakers AAAs provide case management and other supports that let older Vermonters and people with disabilities remain at home. “The historical underfunding of this workforce and this worker shortage has brought us nearly to the brink of a crisis,” Hayden said, adding that annual, objective rate studies would help the state identify gaps and avoid downstream costs such as nursing‑home placements and hospital admissions.

Jill Olsen, executive director of the VNAs of Vermont, said home health agencies serve people who “by definition … need nursing‑home‑level clinical services and you are out of money” when they qualify for Choices for Care. Olsen told the committee that Vermont’s Medicaid reimbursement for skilled home health services is substantially below Medicare equivalents — she said agencies’ skilled rates are about 67% of Medicare — and that reductions and uncertainty in Medicare and Medicare Advantage reimbursements have eroded agencies’ ability to subsidize state programs.

Olsen also described operational pressures: one Vermont home health agency closed last year after a high share of Medicaid patients left the agency financially unsustainable; other agencies absorbed that service area. She and other witnesses said workforce shortages have increased reliance on expensive traveling staff.

Eric Fritz, executive director of Scotland House Adult Daycare and president of the Vermont Association of Adult Day Services, said adult day programs provide nursing, therapy, social work and meals and also relieve family caregivers. Fritz said there are now 11 adult day centers in Vermont (down from 14 pre‑pandemic) and that three closures affected larger population centers. He said the legislature’s Medicaid reimbursement increase to $25 an hour two years ago was critical to preventing still more closures: “If that had not happened, almost definitely more programs would have closed by now,” he told the committee. Fritz said centers together documented nearly $900,000 in lost revenue in the first six months of the fiscal year because Medicaid does not reimburse for participant absences.

Witnesses asked the committee to enact H.13 and to include inflationary adjustments in the FY26 budget. They also asked for clarity on which services are covered by rate reviews; the committee chair asked stakeholders to submit suggested clarifications and technical edits for the bill. Committee members questioned transition issues after changes to case management responsibilities, appropriate case manager caseloads (witnesses said a target of about 30 cases is a reference point but that more complex cases require lower caseloads) and whether existing regulations — for example, the 60‑day supervisory visit in Choices for Care — should be reviewed.

Lawmakers said they will hold additional hearings, solicit more written testimony and consider technical amendments during markup; the committee asked providers and people with lived experience to present further evidence to help quantify the fiscal and access impacts.