Bill Description: House Bill 863 deals with changes to provider rates for residential habilitation and other Home and Community-Based Services (HCBS).
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Note: This bill is similar to H759. It strengthens the section on legislative findings and intent.
Does it create, expand, or enlarge any agency, board, program, function, or activity of government? Conversely, does it eliminate or curtail the size or scope of government?
This legislation would expand government regulation in the residential habilitation space. It would direct DHW to develop HCBS payment rates which include allocations for direct care "worker wages, employee-related expenses, program-related expenses, and general and administrative costs." It would further require private providers who receive payments from DHW’s HCBS to “expend at least the amount allocated to direct care worker wages and employee-related expenses to these categories."
Private providers are required to expend their payments from HCBS in accordance with the way the department apportioned them, restricting their use. Violations of any of these provisions “may result in a department-approved corrective action plan…” or termination of the provider agreement.
However, these regulations serve the purpose of auditing the program and preventing waste, fraud, and abuse. It is unknown whether these measures will actually achieve that end or turn out to be further burdensome regulations.
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Does it increase government spending (for objectionable purposes) or debt? Conversely, does it decrease government spending or debt?
The fiscal note states that the Medicaid budget would be reduced by $21.8 million in General Funds due to a rate reduction, with additional reductions in federal matching funds. The rate reduction comes from the halting of the KW settlement by a court order. This settlement had mandated new services. While the proposed legislation only directs the department to conduct a cost survey, the updated legislative intent now makes it clear this must lead to spending reductions. The department “shall use information from the cost surveys and other sources to evaluate rate adequacy." This bill would lead to meaningful cost reductions in HCBS.
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