Providers urge higher rates, simpler cost reporting for adult residential care in SB 2271 hearing

Senator Kathy Hogan introduced Senate Bill 2271, a proposal to revise payment methodology and provide a near‑term appropriation for adult residential facilities that operate under a home‑and‑community‑based (HCBS) waiver and are licensed as basic care but provide specialized memory and brain‑injury services.

Nikki Wagner, president of the North Dakota Long Term Care Association, told the committee these adult residential facilities provide 24‑hour support for people with dementia, acquired brain injury and other cognitive impairments and are a cost‑effective alternative to nursing homes. “These facilities are a critical part of the care continuum, offering essential support to individuals living with dementia and acquired brain injuries in a cost effective setting with specially trained staff,” Wagner said.

Sponsors and providers explained that provider rates were fixed when the demonstration began roughly 20–25 years ago and have not kept pace with rising costs. Senator Sean Cleary described a multi‑step change in the bill: a 4% inflator in 2025 and 3% in 2026, collection of simplified cost reports in 2025 and a rate recalculation with an added 5% operating margin effective January 2026, and a full recalculation for the next biennium slated for July 1, 2027. The bill includes a section with an appropriation of $2.2 million to cover immediate costs in the current biennium.

Lana Sharvatt, director of Mapleview Memory Care Community, said many residents who qualify for Medicaid spend down private resources and that the current reimbursement gap forces facilities to consider discharging residents to skilled nursing. “Of our 144 residents residing in our 4 Maple View facilities in North Dakota, 36% are currently on Medicaid,” Sharvatt said. She and other providers told the committee that Medicaid reimbursement often falls well short of private‑pay rates and the actual cost of providing specialized care; providers warned that closures or conversions to other models would push people into higher‑cost nursing facilities.

Rebecca Quinn of the UND Center for Rural Health, who manages the North Dakota Brain Injury Network contract, said North Dakota has two 10‑bed adult residential facilities for brain injury and that demand for this level of care exists but that the reimbursement methodology deters expansion.

Department staff indicated they would work with sponsors on technical language and definitions, including the distinction between basic care licensing and HCBS adult residential payment. DHHS officials suggested they could not yet commit to specific language but agreed to provide technical revisions to ensure consistent payment methodology across facility‑based providers and to avoid duplicative payments.

The committee closed the hearing and requested continued work between sponsors and DHHS staff on definitions, cost reporting form and whether the bill’s inflation adjustments should be aligned with broader Medicaid inflation policies. Supporters urged the committee to approve the bill as a way to preserve access to an existing, lower‑cost alternative to nursing homes for people with dementia and acquired brain injury.