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Medicaid provider rates and Medicaid stability draw concern as committee hears HCPF briefing
Summary
Healthcare Policy and Financing officials told the Joint Health Committee that Medicaid spending growth and provider rate decisions are the largest budget pressure. Providers and committee members warned proposed reductions and delayed rate increases risk closures of safety‑net clinics and service cuts.
Healthcare Policy and Financing (HCPF) officials briefed the Joint Health Committee on Medicaid costs, provider rates and operational initiatives, warning that medical inflation is outpacing general revenue growth and that Medicaid is a major driver of the state's general‑fund spending.
Key points from HCPF: HCPF leaders presented the department—s budget: total funds near $17.4 billion and a general‑fund request in the governor—s budget that would raise HCPF spending further. HCPF highlighted medical inflation and post‑public‑health‑emergency policy changes as drivers of higher trend. The department also noted federal match uncertainty (FMAP) and potential federal policy changes as risks to state affordability.
Provider rates and safety‑net clinics: Committee members and presenters discussed the governor—s request for changes that effectively reduce some provider rates while the JBC has considered supplemental or alternative increases. Several JBC members and legislators cited news accounts of Federally Qualified Health Center operator Salud contemplating clinic closures and warned that reductions may force safety‑net providers to reduce services or close, affecting care access in rural and urban "health deserts." HCPF said the governor proposed some targeted rate changes and the department is working with stakeholders on accountables care collaborative (ACC) Phase 3 and other reforms to stabilize the system.
Recovery audit contractor (RAC) audits and MPRAC: The Joint Budget Committee and legislators pressed HCPF about recovery audit contractor practices. The JBC asked for reforms after a 2024 audit flagged deficiencies; the department said it would not eliminate RAC audits but intends to carry forward bills to reform contracting practices and auditing oversight. HCPF staff also discussed the Medicaid Provider Rate Review Advisory Committee (MPRAC) and ongoing rate methodology reviews.
Patient/family testimony and PDN concerns: Several family witnesses testified about private duty nursing (PDN) denials and delays that they said harmed medically fragile children. Witnesses asked the committee to scrutinize HCPF—s use of third‑party RN assessment contractors and the state—s recently introduced RN assessor program; families described denials that they say contributed to severe patient harm. HCPF said it is implementing a single nursing assessor and said federal law requires utilization management, but families argued the program duplicates case managers and raises access and due‑process issues.
Accountable Care Collaborative Phase 3: HCPF said ACC Phase 3 procurement is under way; the department described the model as a seven‑year modernization intended to improve care coordination while controlling trend. The department asked committee members to weigh innovations and program changes against the immediate budgetary pressures that are constraining across‑the‑board provider increases.
Ending: HCPF asked legislators to work with the department and JBC to pursue a mix of strategies: controlling trend, leveraging federal funds, and targeted investments to avoid destabilizing the safety net. Legislators signaled they would press HCPF on provider rate changes, RAC reform and PDN denials in follow‑up hearings.
