Idaho House to consider $22M cuts to Medicaid disability provider pay rates
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Kyle Pfannenstiel, Idaho Capital Sun
BOISE (Idaho Capital Sun) — The Idaho House is set to consider a bill that is meant to cut Medicaid disability provider pay rates by nearly $22 million.
After stalling on an earlier version of the bill last week, the House Health and Welfare Committee on Tuesday voted to send a new version of the bill, House Bill 863, to the House floor. The bill appears to be the Legislature’s response to Gov. Brad Little’s call for $22 million in Medicaid cuts to help balance the budget after years of tax cuts and dwindling state revenues.
The bill itself still lacks a clear mechanism for the cuts, which would apply to residential habilitation providers. The bill’s legislative intent section says the state’s general fund match of $21.8 million for residential habilitation rate increases “can be reduced from the current budget.”
The cuts would come through reducing pay raises that the Legislature approved in 2022. But those raises were meant to expand services and use a new budget tool, which didn’t end up happening because of a court order, the bill’s fiscal note says.
Lawmakers are skeptical that residential habilitation providers would close under cuts
Asked about the cuts’ impacts, committee Chairman John Vander Woude, a Nampa Republican sponsoring the bill, told lawmakers he didn’t expect businesses that provide residential habilitation services would need to shut down.
After the cuts, he said providers would still be left with reimbursement rates that are 33% over where they were four years ago.
“I think they’re gonna have to probably tighten their belt some, as any business would if the income drops a little bit,” Vander Woude told lawmakers. “I don’t see where they would have to shut down.”
Asked about concerns that businesses could shutter under the cuts, Rep. Lori McCann, a Lewiston Republican, said in an interview that she was hopeful that businesses can manage.
“I always worry about that when we cut, but I believe that we’ve got some real manageable situations — that these folks are going to dig deep, and try their best to figure out their budgets, and then hopefully we can come back and reevaluate,” McCann told the Idaho Capital Sun.
Because the committee voted to hold the original residential habilitation cuts bill last week, Vander Woude said he asked Rep. Jordan Redman to bring a Medicaid expansion repeal bill on Monday.
Idaho bill requires state audits of Medicaid disability provider payments
The new residential habilitation cuts bill would also require the Department of Health and Welfare to audit providers. That would cost $850,000 from the state’s general fund.
To implement the bill, Idaho Medicaid Deputy Director Sasha O’Connell told lawmakers that the department will randomly audit 15% payments to providers.
The bill says information from those audits will be used to “develop payment rates, subject to legislative appropriation.” Those rates, the bill says, would “include allocations to direct care worker wages, employee-related expenses, program-related expenses, and general and administrative costs.”
House Bill 863 could receive a vote by the full House in the coming days.
To become law, Idaho bills must pass the House and Senate, and avoid the governor’s veto.
Last week, the Legislature’s budget committee, called the Joint Finance-Appropriations Committee, voted to set the Medicaid budget without acting on the governor’s proposed cuts.