House advances bill requiring rate study for Medicaid home- and community-based providers

The House advanced House Bill 13 on second reading on Feb. 18, 2025, adopting committee amendments and ordering the bill for third reading. The measure directs the Agency of Human Services to determine reasonable and adequate Medicaid reimbursement rates for home- and community-based service providers and for designated and specialized service agencies.

Supporters said the rate study aims to capture the full cost of providing in-home and community-based services, including workforce, inflation and state and federal mandates. "H 13 requires the secretary of human services to determine reasonable and adequate rates for home and community based providers, designated agencies, and specialized service agencies," said Member from Mulcah, who spoke at length on the bill. "These rates must account for state and federal mandates, the cost of goods and services, inflation, and labor market pressures."

The bill defines the covered providers (home health agencies; residential care; enhanced residential care; adult day providers; assisted community care services) and asks the agency to establish a schedule for rate review at least once every five years and a process for annual inflationary adjustments. It also directs the secretary to create a process for seeking emergency financial relief for providers at imminent risk of closure. "The secretary may also consider geographic differences in wages, benefits, and housing cost," the Member from Mulcah said.

Legislative committees recommended the bill. The Human Services Committee reported the bill with amendments; the Appropriations Committee then recommended passage when amended. Representative Iacovone of Morristown, speaking for Appropriations, flagged a calendar reference and said the committee "strongly supports H.13." That committee reported a 10-0-1 vote in favor of its recommendation.

Committee testimony and written witnesses included a wide cross-section of providers and policy stakeholders: officials from designated and specialized agencies (examples cited in committee testimony included Lamoille County Mental Health, Rutland Mental Health Services and the Howard Center), adult day providers, Vermont Care Partners, Vermont Healthcare Association, the Vermont Association of Area Agencies on Aging, Cathedral Square and staff from the Joint Fiscal Office and Legislative Counsel.

Advocates and committee members pointed to provider closures and bed losses in recent years as the policy rationale. In committee testimony cited on the floor, a 2023 rate study was summarized as finding a substantial funding shortfall for certain services; the Member from Mulcah said that study found assistive community care services were underfunded by 79 percent, a factor that contributed to provider closures. The bill sponsor also noted a prior budget adjustment that appropriated $24,500,000 to skilled nursing facilities to cover increased utilization and provided additional emergency relief funds.

The House adopted the committee amendment by voice vote; the ayes carried and third reading was ordered. The floor voice votes on amendment and third reading were not recorded with named tallies on the floor transcript.

Votes at a glance: the Human Services and Appropriations committees recommended the bill; Appropriations reported a committee vote of 10-0-1 on its recommendation. On the floor, the amendment was adopted and third reading was ordered by voice vote.

What the bill would do next: the bill requires a report back to the Legislature on rates and the agency’s schedule for performing rate reviews by Jan. 15 (calendar reference in the legislative text). The bill states it would take effect on passage.

Clarifying note: the floor record describes an appropriation of "$24,500,000 to skilled nursing facilities" and refers to "another 21 for emergency financial relief." The second figure is reported in the transcript without a clear unit and is therefore recorded as not fully specified in the transcript.

For now, H.13 remains on the House calendar for final consideration after third reading is scheduled.