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Health committee deadlocks over whether to lock assisted‑living Medicaid cap into statute
Summary
A contentious session in the Senate Public Health, Welfare and Labor Committee divided providers, DHS and legislators over whether to codify a 1,200 point‑in‑time minimum for Medicaid‑funded assisted‑living slots and how to treat an unduplicated waiver cap of 1,725.
Representative Gray asked the committee to make statute match an agreement reached between the Department of Human Services and assisted‑living providers, saying the language would provide budget certainty by fixing a minimum number of state‑funded assisted‑living slots.
Representatives of providers told the committee the change could hurt rural facilities. Mike Shepherd, an assisted‑living provider who has participated in program negotiations since 2001, said putting a low point‑in‑time number into law "will eventually seriously harm the assisted living program in Arkansas," arguing the program needs flexibility to accommodate changing census and capital‑cost obligations. Shepherd said past rate changes and a subsequent Milliman study had already reduced revenue and occupancy at several rural facilities.
DHS witnesses said the law distinguishes a point‑in‑time cap (how many people may be served at once) from an unduplicated annual cap (how many unique beneficiaries may be served over a year). "The unduplicated cap was at 1,300," DHS legislative staff said, explaining that the waiver approved in December raised the unduplicated count to 1,725 to reduce waiting lists. Catherine Kelly Silva, deputy director of Division of Medical Services, told senators the department's intent is to maintain the 1,725 unduplicated number "regardless of the language in the bill," while acknowledging the bill would place limits that could require legislative action to change.
Senators repeatedly asked for clearer statutory drafting and for data showing how quickly Arkansas would reach any new ceiling. DHS provided preliminary fiscal estimates during later debate on a related permissive bill: raising a point‑in‑time cap toward full utilization could produce multi‑million‑dollar state shares in the first years, depending on rates and waiver terms.
After lengthy questioning and testimony from multiple providers (including Ed Holman and Craig Cloud of DHS), the committee did not adopt Representative Gray’s bill: a motion to pass the bill failed for lack of a second. Lawmakers then advanced a separate permissive measure directing DHS to seek CMS approval to raise certain caps and to report back; that permissive bill moved forward with the committee’s approval.
What happens next: the permissive approach requires DHS to request a waiver change from CMS; if CMS grants permission the change would return to the legislature and the agencies for implementation and possible additional appropriation.
Why it matters: assisted‑living waiver caps determine whether Medicaid beneficiaries can occupy assisted‑living beds and how quickly vacancies can be refilled. Providers testified that statutory inflexibility, paired with rate changes, may force facility closures in rural areas and cause local economic harm, while the state and DHS argued adjusted unduplicated counts reduce waiting lists and better match churn in the program.
