Senate committee adopts $2.5 million appropriation to shore up nursing homes after reimbursement cuts

The Ways and Means Committee on Thursday adopted amendments that add a $2.5 million appropriation intended to blunt recent nursing-home reimbursement cuts and stabilize long-term care providers. Senator Sydney Rosenwald, speaking as sponsor, told the committee the funds would be matched with federal dollars and aimed at preventing closures, unit reductions or staffing cuts after a January rate recalculation left 33 facilities worse off and 19 with particularly severe reductions.

“This amendment will appropriate two and a half million dollars of state funds to be matched with federal funds to help stop an emergency in the nursing home sector,” Rosenwald said, identifying the first funding source as excess Medicaid expansion tax revenues, followed by line-item transfers and then general funds if needed. She said nursing homes rely on Medicaid for about 60% of long-term care funding and that reduced payments risk patients remaining in hospitals and residents receiving less direct care.

Representative Tom Shamberg opposed the amendment during public testimony, arguing the language “conflicts with and substantially alters the intent of House Bill 155” and that the underlying bill deserved clearer policy debate rather than an amendment that he said would smooth over core disagreements.

Nathan White, chief financial officer for the Department of Health and Human Services, told the committee in executive session that tapping Medicaid enhancement tax (MET) surplus directly carries legal and budgetary risks. White said the MET distribution methodology is mirrored in a settlement agreement and state statute and warned that diverting or redirecting MET revenues could reopen that agreement or expose the state to federal limits on directed payments. White also said MET dollars are intended to support Medicaid broadly and that using a surplus now could tighten the Medicaid budget going forward; his preference, he said, would be a straight general-fund appropriation to avoid legal uncertainty.

Committee members pressed for clarity on drafting language; one suggestion was to replace the bill’s word “sufficient” with “unavailable” to better define when the MET surplus could be bypassed in favor of a general-fund appropriation. The chair and sponsors said the adopted amendment (1580S) removes a prior directional 95% allocation and instead establishes a straight $2.5 million appropriation with the MET surplus first in the funding waterfall, then line-item transfers, then general funds.

The committee adopted amendment 1580S by voice vote and also approved related procedural amendments; the bill, as amended (with 1495S and 1580S attached), was advanced toward an "ought to pass" recommendation by voice vote. Sponsors said they will keep the item off consent to allow floor amendments and further discussion.

Next steps: the amended bill will move to the Finance stage as part of the legislative process; committee members and DHHS officials signaled they expect continued scrutiny of legal language about MET use and monitoring of Medicaid budget impacts.