From the Winter 2025 Newsletter

On January 16, 2025, Governor Daniel McKee (D-RI) submitted his proposed State Fiscal Year 2026 (SFY26) budget to the Rhode Island General Assembly (state legislature). As outlined in House Bill 5076, the budget contains significant provisions in Article 8 that will impact home and community-based services (HCBS). Below are key highlights that home care providers should be aware:

Sunsetting the Medicaid Home Care Annual Rate Increase: The Governor proposes eliminating the annual Cost Inflation Factor (CIF), which has historically increased Medicaid reimbursement rates for home care providers to keep pace with inflation. Commonly referred to as a “cost-of-living adjustment” (COLA), this small annual increase is based on the U.S. Department of Labor’s New England Consumer Price Index for medical care. While nursing homes are slated to receive a 2.3% CIF in this proposed budget, home care services would lose this adjustment. Governor McKee’s rationale is to redirect funds to other community programs like senior centers and Meals on Wheels. The Governor’s office points to the large rate increases approved for home care services in the current fiscal year, up to 30% for skilled nursing and therapeutic services and 75.5% for personal care and homemaking services, and argues that further adjustments will be addressed in biennial recommendations by the Rhode Island Office of the Health Insurance Commissioner (OHIC).

Discontinuation of Behavioral Health Training Program and Rate Enhancement: The budget does not allocate funding to continue the behavioral health training program through Rhode Island College’s Institute for Education in Healthcare, nor the $0.39 per quarter-hour rate enhancement for Medicaid-contracted home care providers offering behavioral health services. This program has provided critical support to home care providers by enabling wage increases for participating paraprofessional employees. The Rhode Island Partnership for Home Care will file legislation to secure continued funding for this program, which has proven to be cost-efficient for the State to keep eligible clients, within and outside of the Medicaid Program, in their home versus requiring facility-based care. Between January 2022 and December 2024, only $651,964 was expended for training and $120,000 was reimbursed to providers for the rate enhancement during the latter half of 2024.

Lack of Medicaid Rate Floor Policy: The proposed budget does not include a rate floor policy, which would set a minimum reimbursement rate for home care providers under Medicaid managed care organizations (MCOs). Without this policy, commercial insurers participating in the upcoming CMS 1115 Demonstration State Health Plan (D-SHP) waiver could reimburse home care providers below the state’s fee-for-service rates established by the General Assembly. This impacts home care, home health and hospice providers regardless of their payor sources as it has implications to commercial insurance contracts beyond the Medicaid Program. To protect providers, The Rhode Island Partnership for Home Care will advocate for legislation to establish a rate floor policy before the new waiver program launches.

Together, we can advocate for the funding and policies needed to sustain quality home care, home health and hospice services in Rhode Island. Members of the Rhode Island Partnership for Home Care will receive more information, including Legislative Alerts at the appropriate times throughout this legislative session of the General Assembly, informing members to take action.

If your company is not yet a member, do not let your competitors speak for you, your patients and clients and your direct care and operations staff. Contact the Rhode Island Partnership for Home Care at (401) 351-1010 to learn how your company can grow and succeed through the benefit of membership!