Montana Medicaid providers get more money, but not full funding, in most recent House action

By: - April 3, 2023 7:37 pm

The Montana Department of Public Health and Human Services (Photo by Eric Seidle/ For the Daily Montanan).

In the end, both Republicans and Democrats were frustrated with the bill to push more money to Medicaid provider rates, said Rep. John Fitzpatrick, R-Anaconda, who figured the irritation was one sign of a good compromise.

Monday, House Bill 649 passed 82-18 on second reading. Rep. Mary Caferro, D-Helena, had originally proposed the bill to fund provider rates the rest of the way to the levels a national consultant recommended.

The original bill would have cost $25 million in general fund dollars for the biennium to close the gap between money in the larger general budget bill and the recommended levels, according to the sponsor.

However, in committee, legislators amended the bill to put $5 million of general fund money to the cause instead of the $25 million. They also put $9.3 million of federal money to providers.

The bill places those dollars in the director’s office of the Department of Public Health and Human Services to increase rates for Medicaid providers and non-Medicaid providers studied by the consultant, Guidehouse.

This session, legislators have debated the right amount of reimbursement rates for nursing homes and other Medicaid healthcare facilities in the state, following the study that analyzed the actual costs of providing services.

The study came on the heels of high-profile nursing home closures in Montana last year. Group homes have closed as well, and providers are struggling for workers.

House Bill 2, the monster legislation that funds state services, puts $294.9 million more of total dollars toward Medicaid provider rates over the biennium, according to the Legislative Fiscal Division. HB 649 would add to the total.

At a press conference last week, chief executive David Trost of St. John’s United in Billings said the new rates in HB2 hit only 90% of the recommended rates for nursing homes. So a majority still have expenses that exceed average costs, he said.

He said he was recently asked by a group of churches in southeast Montana if the state will continue to see closures.

“I said unfortunately, I think we might, but at a slower rate,” Trost said.

At the press conference hosted by Big Sky 55+, a couple from Joliet talked about the support provided to family members of loved ones who have disabilities.

John and Carol Harwood said they are parents of an adult child who lived in a group home for adults with developmental disabilities, and Medicaid has brought them quality care and peace of mind.

But now, they said budgets are hemorrhaging money. John Harwood turned to scripture as guidance and wisdom to consider at this crossroads.

“We then that are strong ought to bear the infirmities of the weak and not to please ourselves,” he read from Romans in the Bible.

The Harwoods were advocating for funding rates up to the levels the Guidehouse study said represented actual costs. The legislature funded the study last session in 2021.

This session, other bills may add additional money for providers, including Senate Bill 296, which includes changes to room and board calculations for assisted living facilities. It has bipartisan support.

Sponsored by Rep. Jennifer Carlson, R-Churchill, House Bill 891 would appropriate one-time stabilization money for nursing homes. It passed the House 86-13 on second reading Friday.

The bill had proposed $40 million, and it was amended in committee to provide $5 million. The money is supposed to help backfill the needs of nursing homes for the current biennium, which the new provider rates wouldn’t affect.

During a hearing on HB891, the Montana Health Care Association’s Rose Hughes said the previous legislature had appropriated money to nursing homes that isn’t being spent on them.

Hughes noted some $29 million was unspent last year and an estimated $21 million is projected to go unspent in the current 2023 fiscal year.

At the same hearing, the Legislative Fiscal Division noted $168.6 million had been appropriated for 2023, and $147.7 was expected to be spent — $21 million in unspent money.

A handout from the Montana Health Care Associated noted the same figures in a DPHHS budget status report. The handout also outlined the totals in a status report for 2022, with $180.1 million in the nursing home budget and $150.4 million spent.

In an email, DPHHS spokesperson Jon Ebelt said the legislature appropriates money based on projections: “These projections, as demonstrated in our budget status reports, are projections only — not guaranteed line-item appropriations for certain provider types.”

In 2022, nursing home utilization was “significantly lower” than DPHHS projected, Ebelt said. In the meantime, other categories, like Community First Choice and Big Sky Waiver, were “significantly higher.”

Big Sky Waiver helps people including those who are blind or have physical disabilities live at home, and Community First Choice helps elderly or disabled people who need in-home care.

In the handout from the Montana Health Care Association, Hughes also noted the money was transferred to other areas, such as Community First choice and the Big Sky Waiver.

“The department has the discretion to do what it did, but it was a conscious decision to spend the money elsewhere,” Hughes said in an email.

One of the reasons providers want higher rates is because of the labor shortage. They have testified in the legislature this session that workers can make more doing labor that is less emotional and physically demanding, like food service or hospitality.

But according to data from the Montana Health Care Association, employment trends show nursing homes in the state are struggling more than some others in the health care industry when it comes to workers.

Citing data from the Bureau of Labor Statistics, the association handout showed hospitals and home health care providers had more employees in 2022 than they did in 2018, before the pandemic, for example.

On the other hand, the data show nursing and assisted living facilities have fewer total employees now than in 2018.

Tuesday is the deadline for appropriation and revenue bills to move to the next chamber.

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Keila Szpaller
Keila Szpaller

Keila Szpaller is deputy editor of the Daily Montanan and covers education. Before joining States Newsroom Montana, she served as city editor of the Missoulian, the largest news outlet in western Montana.