Board approves provider-fee and hospital-rate rules to align funding with federal match and budget actions

The Medical Services Board approved a package of rule updates that adjust provider-fee per-diem amounts and hospital rate-setting authority to align state collection of fees and supplemental payments with federal match requirements and with state budget actions.

Jeff Witrick (Provider Fee Unit) presented final-adoption revisions to MSB 25-09-25-b that update per-diem fees for federal fiscal year 2024-25 so fee collections match the state’s funding obligations and federal draw-down plans under the CHASE mechanism. "What these rules do is simply revise the per diem fees that we need to collect so that the amount of fees we could collect match the funding obligation for federal fiscal year 24-25," Witrick said.

Andrew Avalos (fee-for-service rates) presented rules (MSB 25-09-25-c) that authorize the department to implement hospital-rate reductions in response to executive orders tied to HR1’s state-revenue impacts. Avalos cited HR1 and recent executive orders (D 25-14 and 25-20) as the administrative context for temporary rate adjustments to help bring the state budget into balance.

Board members discussed CHASE-board review and whether rules should permit rate increases by executive order in future years; Witrick said the CHASE board had reviewed and recommended the rule. Both documents were adopted by the board.

Ending: The rules were approved to ensure fee collections and rate-setting authority align with federal and state budget mechanics; the department will continue to brief the board and the CHASE board as implementation continues.