ARTICLE 8

RELATING TO MEDICAL ASSISTANCE

     SECTION 1. Section 23-17-38.1 of the General Laws in Chapter 23-17 entitled "Licensing

of Healthcare Facilities" is hereby amended to read as follows:

     23-17-38.1. Hospitals – Licensing fee.

     (a) There is imposed a hospital licensing fee described in subsections (c) through (f) for

state fiscal years 2024 and 2025 against net patient-services revenue of every non-government

owned hospital as defined herein for the hospital’s first fiscal year ending on or after January 1,

2022. The hospital licensing fee shall have three (3) tiers with differing fees based on inpatient and

outpatient net patient-services revenue. The executive office of health and human services, in

consultation with the tax administrator, shall identify the hospitals in each tier, subject to the

definitions in this section, by July 15, 2023, and shall notify each hospital of its tier by August 1,

2023.

     (b) There is also imposed a hospital licensing fee described in subsections (c) through (f)

for state fiscal years 2026 and 2027 against net patient-services revenue of every non-government

owned hospital as defined herein for the hospital’s first fiscal year ending on or after January 1,

2023. The hospital licensing fee shall have three (3) tiers with differing fees based on inpatient and

outpatient net patient-services revenue. The executive office of health and human services, in

consultation with the tax administrator, shall identify the hospitals in each tier, subject to the

definitions in this section, annually by July 15, 2025, and shall notify each hospital of its assigned

tier by August 1, 2025.

     (c) Tier 1 is composed of hospitals that do not meet the description of either Tier 2 or Tier

3.

     (1) The inpatient hospital licensing fee for Tier 1 is equal to thirteen and twelve hundredths

percent (13.12%) of the inpatient net patient-services revenue derived from inpatient net patient-

services revenue of every Tier 1 hospital.

     (2) The outpatient hospital licensing fee for Tier 1 is equal to thirteen and thirty hundredths

percent (13.30%) of the net patient-services revenue derived from outpatient net patient-services

revenue of every Tier 1 hospital.

     (d) Tier 2 is composed of high Medicaid/uninsured cost hospitals and independent

hospitals.

     (1) The inpatient hospital licensing fee for Tier 2 is equal to two and sixty-three hundredths

percent (2.63%) of the inpatient net patient-services revenue derived from inpatient net patient-

services revenue of every Tier 2 hospital.

     (2) The outpatient hospital licensing fee for Tier 2 is equal to two and sixty-six hundredths

percent (2.66%) of the outpatient net patient-services revenue derived from outpatient net patient-

services revenue of every Tier 2 hospital.

     (e) Tier 3 is composed of hospitals that are Medicare-designated low-volume hospitals and

rehabilitative hospitals.

     (1) The inpatient hospital licensing fee for Tier 3 is equal to one and thirty-one hundredths

percent (1.31%) of the inpatient net patient-services revenue derived from inpatient net patient-

services revenue of every Tier 3 hospital.

     (2) The outpatient hospital licensing fee for Tier 3 is equal to one and thirty-three

hundredths percent (1.33%) of the outpatient net patient-services revenue derived from outpatient

net patient-services revenue of every Tier 3 hospital.

     (f) There is also imposed a hospital licensing fee for state fiscal year 2024 against state-

government owned and operated hospitals in the state as defined herein. The hospital licensing fee

is equal to five and twenty-five hundredths percent (5.25%) of the net patient-services revenue of

every hospital for the hospital’s first fiscal year ending on or after January 1, 2022. There is also

imposed a hospital licensing fee for state fiscal years 2025, and 2026, and 2027 against state-

government owned and operated hospitals in the state as defined herein equal to five and twenty-

five hundredths percent (5.25%) of the net patient-services revenue of every hospital for the

hospital’s first fiscal year ending on or after January 1, 2023.

     (g) The hospital licensing fee described in subsections (b) through (f) is subject to U.S.

Department of Health and Human Services approval of a request to waive the requirement that

healthcare-related taxes be imposed uniformly as contained in 42 C.F.R. § 433.68(d).

     (h) This hospital licensing fee shall be administered and collected by the tax administrator,

division of taxation within the department of revenue, and all the administration, collection, and

other provisions of chapter 51 of title 44 shall apply. Every hospital shall pay the licensing fee to

the tax administrator before June 25 of each fiscal year, and payments shall be made by electronic

transfer of monies to the tax administrator and deposited to the general fund. Every hospital shall,

on or before August 1 of each fiscal year, make a return to the tax administrator containing the

correct computation of inpatient and outpatient net patient-services revenue for the hospital data

referenced in this section subsection (a) and/or (b), and the licensing fee due upon that amount. All

returns shall be signed by the hospital’s authorized representative, subject to the pains and penalties

of perjury.

     (i) For purposes of this section the following words and phrases have the following

meanings:

     (1) “Gross patient-services revenue” means the gross revenue related to patient care

services.

     (2) “High Medicaid/uninsured cost hospital” means a hospital for which the hospital’s total

uncompensated care, as calculated pursuant to § 40-8.3-2(4), divided by the hospital’s total net

patient-services revenues, is equal to six percent (6.0%) or greater.

     (3) “Hospital” means the actual facilities and buildings in existence in Rhode Island,

licensed pursuant to § 23-17-1 et seq. on June 30, 2010, and thereafter any premises included on

that license, regardless of changes in licensure status pursuant to chapter 17.14 of this title (hospital

conversions) and § 23-17-6(b) (change in effective control), that provides short-term acute inpatient

and/or outpatient care to persons who require definitive diagnosis and treatment for injury, illness,

disabilities, or pregnancy. Notwithstanding the preceding language, the negotiated Medicaid

managed care payment rates for a court-approved purchaser that acquires a hospital through

receivership, special mastership, or other similar state insolvency proceedings (which court-

approved purchaser is issued a hospital license after January 1, 2013) shall be based upon the newly

negotiated rates between the court-approved purchaser and the health plan, and such rates shall be

effective as of the date that the court-approved purchaser and the health plan execute the initial

agreement containing the newly negotiated rate. The rate-setting methodology for inpatient hospital

payments and outpatient hospital payments set forth in §§ 40-8-13.4(b) and 40-8-13.4(b)(2),

respectively, shall thereafter apply to negotiated increases for each annual twelve-month (12)

period as of July 1 following the completion of the first full year of the court-approved purchaser’s

initial Medicaid managed care contract.

     (4) “Independent hospitals” means a hospital not part of a multi-hospital system.

     (5) “Inpatient net patient-services revenue” means the charges related to inpatient care

services less (i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual

allowances.

     (6) “Medicare-designated low-volume hospital” means a hospital that qualifies under 42

C.F.R. 412.101(b)(2) for additional Medicare payments to qualifying hospitals for the higher

incremental costs associated with a low volume of discharges.

     (7) “Net patient-services revenue” means the charges related to patient care services less

(i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual allowances.

     (8) “Non-government owned hospitals” means a hospital not owned and operated by the

state of Rhode Island.

     (9) “Outpatient net patient-services revenue” means the charges related to outpatient care

services less (i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual

allowances.

     (10) “Rehabilitative hospital” means Rehabilitation Hospital Center licensed by the Rhode

Island department of health.

     (11) “State-government owned and operated hospitals” means a hospital facility licensed

by the Rhode Island department of health, owned and operated by the state of Rhode Island.

     (j) The tax administrator in consultation with the executive office of health and human

services shall make and promulgate any rules, regulations, and procedures not inconsistent with

state law and fiscal procedures that he or she deems necessary for the proper administration of this

section and to carry out the provisions, policy, and purposes of this section.

     (k) The licensing fee imposed by subsections (a) through (f) shall apply to hospitals as

defined herein that are duly licensed on July 1, 2024, and shall be in addition to the inspection fee

imposed by § 23-17-38 and to any licensing fees previously imposed in accordance with this

section.

     SECTION 2. Sections 40-8-13.4 and 40-8-19 of the General Laws in Chapter 40-8 entitled

“Medical Assistance” is hereby amended to read as follows:

     40-8-13.4. Rate methodology for payment for in-state and out-of-state hospital

services.

     (a) The executive office of health and human services (“executive office”) shall implement

a new methodology for payment for in-state and out-of-state hospital services in order to ensure

access to, and the provision of, high-quality and cost-effective hospital care to its eligible recipients.

     (b) In order to improve efficiency and cost-effectiveness, the executive office shall:

     (1)(i) With respect to inpatient services for persons in fee-for-service Medicaid, which is

non-managed care, implement a new payment methodology for inpatient services utilizing the

Diagnosis Related Groups (DRG) method of payment, which is, a patient-classification method

that provides a means of relating payment to the hospitals to the type of patients cared for by the

hospitals. It is understood that a payment method based on DRG may include cost outlier payments

and other specific exceptions. The executive office will review the DRG-payment method and the

DRG base price annually, making adjustments as appropriate in consideration of such elements as

trends in hospital input costs; patterns in hospital coding; beneficiary access to care; and the Centers

for Medicare and Medicaid Services national CMS Prospective Payment System (IPPS) Hospital

Input Price Index. For the twelve-month (12) period beginning July 1, 2015, the DRG base rate for

Medicaid fee-for-service inpatient hospital services shall not exceed ninety-seven and one-half

percent (97.5%) of the payment rates in effect as of July 1, 2014. Beginning July 1, 2019, the DRG

base rate for Medicaid fee-for-service inpatient hospital services shall be 107.2% of the payment

rates in effect as of July 1, 2018. Increases in the Medicaid fee-for-service DRG hospital payments

for the twelve-month (12) period beginning July 1, 2020, shall be based on the payment rates in

effect as of July 1 of the preceding fiscal year, and shall be the Centers for Medicare and Medicaid

Services national Prospective Payment System (IPPS) Hospital Input Price Index. Beginning July

1, 2022, the DRG base rate for Medicaid fee-for-service inpatient hospital services shall be one

hundred five percent (105%) of the payment rates in effect as of July 1, 2021. Beginning July 1,

2026, the DRG base rate for Medicaid fee-for-service inpatient hospital services shall be one

hundred and two and five-tenths percent (102.5%) of the payment rates in effect as of July 1, 2025.

Increases in the Medicaid fee-for-service DRG hospital payments for each annual twelve-month

(12) period beginning July 1, 20237, shall be based on the payment rates in effect as of July 1 of

the preceding fiscal year, and shall be the Centers for Medicare and Medicaid Services national

Prospective Payment System (IPPS) Hospital Input Price Index.

     (ii) With respect to inpatient services, (A) It is required as of January 1, 2011, until

December 31, 2011, that the Medicaid managed care payment rates between each hospital and

health plan shall not exceed ninety and one-tenth percent (90.1%) of the rate in effect as of June

30, 2010. Increases in inpatient hospital payments for each annual twelve-month (12) period

beginning January 1, 2012, may not exceed the Centers for Medicare and Medicaid Services

national CMS Prospective Payment System (IPPS) Hospital Input Price Index for the applicable

period; (B) Provided, however, for the twenty-four-month (24) period beginning July 1, 2013, the

Medicaid managed care payment rates between each hospital and health plan shall not exceed the

payment rates in effect as of January 1, 2013, and for the twelve-month (12) period beginning July

1, 2015, the Medicaid managed care payment inpatient rates between each hospital and health plan

shall not exceed ninety-seven and one-half percent (97.5%) of the payment rates in effect as of

January 1, 2013; (C) Increases in inpatient hospital payments for each annual twelve-month (12)

period beginning July 1, 2017, shall be the Centers for Medicare and Medicaid Services national

CMS Prospective Payment System (IPPS) Hospital Input Price Index, less Productivity

Adjustment, for the applicable period and shall be paid to each hospital retroactively to July 1; (D)

Beginning July 1, 2019, the Medicaid managed care payment inpatient rates between each hospital

and health plan shall be 107.2% of the payment rates in effect as of January 1, 2019, and shall be

paid to each hospital retroactively to July 1; (E) Increases in inpatient hospital payments for each

annual twelve-month (12) period beginning July 1, 2020, shall be based on the payment rates in

effect as of January 1 of the preceding fiscal year, and shall be the Centers for Medicare and

Medicaid Services national CMS Prospective Payment System (IPPS) Hospital Input Price Index,

less Productivity Adjustment, for the applicable period and shall be paid to each hospital

retroactively to July 1; the executive office will develop an audit methodology and process to assure

that savings associated with the payment reductions will accrue directly to the Rhode Island

Medicaid program through reduced managed care plan payments and shall not be retained by the

managed care plans; (F) Beginning July 1, 2022, the Medicaid managed care payment inpatient

rates between each hospital and health plan shall be one hundred five percent (105%) of the

payment rates in effect as of January 1, 2022, and shall be paid to each hospital retroactively to July

1 within ninety days of passage; (G) Beginning July 1, 2026, the Medicaid managed care payment

inpatient rates between each hospital and health plan shall be one hundred and two and five-tenths

percent (102.5%) of the payment rates in effect as of January 1, 2025; (H) Increases in inpatient

hospital payments for each annual twelve-month (12) period beginning July 1, 20237, shall be

based on the payment rates in effect as of January 1 of the preceding fiscal year, and shall be the

Centers for Medicare and Medicaid Services national CMS Prospective Payment System (IPPS)

Hospital Input Price Index, less Productivity Adjustment, for the applicable period and shall be

paid to each hospital retroactively to July 1 within ninety days of passage; (HI) All hospitals

licensed in Rhode Island shall accept such payment rates as payment in full; and (IJ) For all such

hospitals, compliance with the provisions of this section shall be a condition of participation in the

Rhode Island Medicaid program.

     (2) With respect to outpatient services and notwithstanding any provisions of the law to the

contrary, for persons enrolled in fee-for-service Medicaid, the executive office will reimburse

hospitals for outpatient services using a rate methodology determined by the executive office and

in accordance with federal regulations. Fee-for-service outpatient rates shall align with Medicare

payments for similar services. Notwithstanding the above, there shall be no increase in the

Medicaid fee-for-service outpatient rates effective on July 1, 2013, July 1, 2014, or July 1, 2015.

For the twelve-month (12) period beginning July 1, 2015, Medicaid fee-for-service outpatient rates

shall not exceed ninety-seven and one-half percent (97.5%) of the rates in effect as of July 1, 2014.

Increases in the outpatient hospital payments for the twelve-month (12) period beginning July 1,

2016, may not exceed the CMS national Outpatient Prospective Payment System (OPPS) Hospital

Input Price Index. Beginning July 1, 2019, the Medicaid fee-for-service outpatient rates shall be

107.2% of the payment rates in effect as of July 1, 2018. Increases in the outpatient hospital

payments for the twelve-month (12) period beginning July 1, 2020, shall be based on the payment

rates in effect as of July 1 of the preceding fiscal year, and shall be the CMS national Outpatient

Prospective Payment System (OPPS) Hospital Input Price Index. Beginning July 1, 2022, the

Medicaid fee-for-service outpatient rates shall be one hundred five percent (105%) of the payment

rates in effect as of July 1, 2021. Beginning July 1, 2026, the Medicaid fee-for-service outpatient

rates shall be one hundred and two and five-tenths percent (102.5%) of the payment rates in effect

as of July 1, 2025. Increases in the outpatient hospital payments for each annual twelve-month (12)

period beginning July 1, 20237, shall be based on the payment rates in effect as of July 1 of the

preceding fiscal year, and shall be the CMS national Outpatient Prospective Payment System

(OPPS) Hospital Input Price Index. With respect to the outpatient rate, (i) It is required as of January

1, 2011, until December 31, 2011, that the Medicaid managed care payment rates between each

hospital and health plan shall not exceed one hundred percent (100%) of the rate in effect as of June

30, 2010; (ii) Increases in hospital outpatient payments for each annual twelve-month (12) period

beginning January 1, 2012, until July 1, 2017, may not exceed the Centers for Medicare and

Medicaid Services national CMS Outpatient Prospective Payment System OPPS Hospital Price

Index for the applicable period; (iii) Provided, however, for the twenty-four-month (24) period

beginning July 1, 2013, the Medicaid managed care outpatient payment rates between each hospital

and health plan shall not exceed the payment rates in effect as of January 1, 2013, and for the

twelve-month (12) period beginning July 1, 2015, the Medicaid managed care outpatient payment

rates between each hospital and health plan shall not exceed ninety-seven and one-half percent

(97.5%) of the payment rates in effect as of January 1, 2013; (iv) Increases in outpatient hospital

payments for each annual twelve-month (12) period beginning July 1, 2017, shall be the Centers

for Medicare and Medicaid Services national CMS OPPS Hospital Input Price Index, less

Productivity Adjustment, for the applicable period and shall be paid to each hospital retroactively

to July 1; (v) Beginning July 1, 2019, the Medicaid managed care outpatient payment rates between

each hospital and health plan shall be one hundred seven and two-tenths percent (107.2%) of the

payment rates in effect as of January 1, 2019, and shall be paid to each hospital retroactively to July

1; (vi) Increases in outpatient hospital payments for each annual twelve-month (12) period

beginning July 1, 2020, shall be based on the payment rates in effect as of January 1 of the preceding

fiscal year, and shall be the Centers for Medicare and Medicaid Services national CMS OPPS

Hospital Input Price Index, less Productivity Adjustment, for the applicable period and shall be

paid to each hospital retroactively to July 1; (vii) Beginning July 1, 2022, the Medicaid managed

care outpatient payment rates between each hospital and health plan shall be one hundred five

percent (105%) of the payment rates in effect as of January 1, 2022, and shall be paid to each

hospital retroactively to July 1 within ninety days of passage; (viii) Beginning July 1, 2026, the

Medicaid managed care outpatient payment rates between each hospital and health plan shall be

one hundred and two and five-tenths percent (102.5%) of the payment rates in effect as of January

1, 2025; (ix) Increases in outpatient hospital payments for each annual twelve-month (12) period

beginning July 1, 20207, shall be based on the payment rates in effect as of January 1 of the

preceding fiscal year, and shall be the Centers for Medicare and Medicaid Services national CMS

OPPS Hospital Input Price Index, less Productivity Adjustment, for the applicable period and shall

be paid to each hospital retroactively to July 1.

     (3) “Hospital,” as used in this section, shall mean the actual facilities and buildings in

existence in Rhode Island, licensed pursuant to § 23-17-1 et seq. on June 30, 2010, and thereafter

any premises included on that license, regardless of changes in licensure status pursuant to chapter

17.14 of title 23 (hospital conversions) and § 23-17-6(b) (change in effective control), that provides

short-term, acute inpatient and/or outpatient care to persons who require definitive diagnosis and

treatment for injury, illness, disabilities, or pregnancy. Notwithstanding the preceding language,

the Medicaid managed care payment rates for a court-approved purchaser that acquires a hospital

through receivership, special mastership or other similar state insolvency proceedings (which court-

approved purchaser is issued a hospital license after January 1, 2013), shall be based upon the new

rates between the court-approved purchaser and the health plan, and such rates shall be effective as

of the date that the court-approved purchaser and the health plan execute the initial agreement

containing the new rates. The rate-setting methodology for inpatient-hospital payments and

outpatient-hospital payments set forth in subsections (b)(1)(ii)(C) and (b)(2), respectively, shall

thereafter apply to increases for each annual twelve-month (12) period as of July 1 following the

completion of the first full year of the court-approved purchaser’s initial Medicaid managed care

contract.

     (c) It is intended that payment utilizing the DRG method shall reward hospitals for

providing the most efficient care, and provide the executive office the opportunity to conduct value-

based purchasing of inpatient care.

     (d) The secretary of the executive office is hereby authorized to promulgate such rules and

regulations consistent with this chapter, and to establish fiscal procedures he or she deems

necessary, for the proper implementation and administration of this chapter in order to provide

payment to hospitals using the DRG-payment methodology. Furthermore, amendment of the Rhode

Island state plan for Medicaid, pursuant to Title XIX of the federal Social Security Act, 42 U.S.C.

§ 1396 et seq., is hereby authorized to provide for payment to hospitals for services provided to

eligible recipients in accordance with this chapter.

     (e) The executive office shall comply with all public notice requirements necessary to

implement these rate changes.

     (f) As a condition of participation in the DRG methodology for payment of hospital

services, every hospital shall submit year-end settlement reports to the executive office within one

year from the close of a hospital’s fiscal year. Should a participating hospital fail to timely submit

a year-end settlement report as required by this section, the executive office shall withhold

financial-cycle payments due by any state agency with respect to this hospital by not more than ten

percent (10%) until the report is submitted. For hospital fiscal year 2010 and all subsequent fiscal

years, hospitals will not be required to submit year-end settlement reports on payments for

outpatient services. For hospital fiscal year 2011 and all subsequent fiscal years, hospitals will not

be required to submit year-end settlement reports on claims for hospital inpatient services. Further,

for hospital fiscal year 2010, hospital inpatient claims subject to settlement shall include only those

claims received between October 1, 2009, and June 30, 2010.

     (g) The provisions of this section shall be effective upon implementation of the new

payment methodology set forth in this section and § 40-8-13.3, which shall in any event be no later

than March 30, 2010, at which time the provisions of §§ 40-8-13.2, 27-19-14, 27-19-15, and 27-

19-16 shall be repealed in their entirety.

     40-8-19. Rates of payment to nursing facilities.

     (a) Rate reform.

     (1) The rates to be paid by the state to nursing facilities licensed pursuant to chapter 17 of

title 23, and certified to participate in Title XIX of the Social Security Act for services rendered to

Medicaid-eligible residents, shall be reasonable and adequate to meet the costs that must be

incurred by efficiently and economically operated facilities in accordance with 42 U.S.C. §

1396a(a)(13). The executive office of health and human services (“executive office”) shall

promulgate or modify the principles of reimbursement for nursing facilities in effect as of July 1,

2011, to be consistent with the provisions of this section and Title XIX, 42 U.S.C. § 1396 et seq.,

of the Social Security Act.

     (2) The executive office shall review the current methodology for providing Medicaid

payments to nursing facilities, including other long-term care services providers, and is authorized

to modify the principles of reimbursement to replace the current cost-based methodology rates with

rates based on a price-based methodology to be paid to all facilities with recognition of the acuity

of patients and the relative Medicaid occupancy, and to include the following elements to be

developed by the executive office:

     (i) A direct-care rate adjusted for resident acuity;

     (ii) An indirect-care and other direct-care rate comprised of a base per diem for all

facilities;

     (iii) Revision of rates as necessary based on increases in direct and indirect costs beginning

October 2024 utilizing data from the most recent finalized year of facility cost report. The per diem

rate components deferred in subsections (a)(2)(i) and (a)(2)(ii) of this section shall be adjusted

accordingly to reflect changes in direct and indirect care costs since the previous rate review;

     (iv) Application of a fair-rental value system;

     (v) Application of a pass-through system; and

     (vi) Adjustment of rates by the change in a recognized national nursing home inflation

index to be applied on October 1 of each year, beginning October 1, 2012. This adjustment will not

occur on October 1, 2013, October 1, 2014, or October 1, 2015, but will occur on April 1, 2015.

The adjustment of rates will also not occur on October 1, 2017, October 1, 2018, October 1, 2019,

and October 2022. Effective July 1, 2018, rates paid to nursing facilities from the rates approved

by the Centers for Medicare and Medicaid Services and in effect on October 1, 2017, both fee-for-

service and managed care, will be increased by one and one-half percent (1.5%) and further

increased by one percent (1%) on October 1, 2018, and further increased by one percent (1%) on

October 1, 2019. Effective October 1, 2022, rates paid to nursing facilities from the rates approved

by the Centers for Medicare and Medicaid Services and in effect on October 1, 2021, both fee-for-

service and managed care, will be increased by three percent (3%). In addition to the annual nursing

home inflation index adjustment, there shall be a base rate staffing adjustment of one-half percent

(0.5%) on October 1, 2021, one percent (1.0%) on October 1, 2022, and one and one-half percent

(1.5%) on October 1, 2023. For the twelve-month (12) period beginning October 1, 2025, rates paid

to nursing facilities from the rates approved by the Centers for Medicare and Medicaid Services

and in effect on October 1, 2024, both fee-for-service and managed care, will be increased by two

and three-tenths percent (2.3%). There shall also be a base rate staffing adjustment of three percent

(3%) effective October 1, 2025. Not less than one hundred percent (100%) of this base-rate staffing

adjustment shall be expended by each nursing facility to increase compensation, wages, benefits,

and related employer costs, for eligible direct-care staff, including the cost of hiring additional

eligible direct-care positions, as defined in this subsection (a)(2)(vi). The inflation index shall be

applied without regard for the transition factors in subsections (b)(1) and (b)(2). Effective October

1, 2026, rates paid to nursing facilities from the rates approved by the Centers for Medicare and

Medicaid Services and in effect on October 1, 2025, both fee-for-service and managed care, shall

be increased by two and five-tenths percent (2.5%). For purposes of October 1, 2016, adjustment

only, any rate increase that results from application of the inflation index to subsections (a)(2)(i)

and (a)(2)(ii) shall be dedicated to increase compensation for direct-care workers in the following

manner: Not less than eighty-five percent (85%) of this aggregate amount shall be expended to

fund an increase in wages, benefits, or related employer costs of direct-care staff of nursing homes.

For purposes of this section, direct-care staff shall include registered nurses (RNs), licensed

practical nurses (LPNs), certified nursing assistants (CNAs), certified medical technicians,

housekeeping staff, laundry staff, dietary staff, or other similar employees providing direct-care

services; provided, however, that this definition of direct-care staff shall not include: (i) RNs and

LPNs who are classified as “exempt employees” under the federal Fair Labor Standards Act (29

U.S.C. § 201 et seq.); or (ii) CNAs, certified medical technicians, RNs, or LPNs who are contracted,

or subcontracted, through a third-party vendor or staffing agency. By July 31, 2017, nursing

facilities shall submit to the secretary, or designee, a certification that they have complied with the

provisions of this subsection (a)(2)(vi) with respect to the inflation index applied on October 1,

2016. Any facility that does not comply with the terms of such certification shall be subjected to a

clawback, paid by the nursing facility to the state, in the amount of increased reimbursement subject

to this provision that was not expended in compliance with that certification.

     (3) Commencing on October 1, 2021, eighty percent (80%) of any rate increase that results

from application of the inflation index to subsections (a)(2)(i) and (a)(2)(ii) of this section shall be

dedicated to increase compensation for all eligible direct-care workers in the following manner on

October 1, of each year.

     (i) For purposes of this subsection, compensation increases shall include base salary or

hourly wage increases, benefits, other compensation, and associated payroll tax increases for

eligible direct-care workers. This application of the inflation index shall apply for Medicaid

reimbursement in nursing facilities for both managed care and fee-for-service. For purposes of this

subsection, direct-care staff shall include registered nurses (RNs), licensed practical nurses (LPNs),

certified nursing assistants (CNAs), certified medication technicians, licensed physical therapists,

licensed occupational therapists, licensed speech-language pathologists, mental health workers

who are also certified nurse assistants, physical therapist assistants, social workers, or any nurse

aides with a valid license, even if it is probationary, housekeeping staff, laundry staff, dietary staff,

or other similar employees providing direct-care services; provided, however that this definition of

direct-care staff shall not include:

     (A) RNs and LPNs who are classified as “exempt employees” under the federal Fair Labor

Standards Act (29 U.S.C. § 201 et seq.); or

     (B) CNAs, certified medication technicians, RNs, or LPNs who are contracted or

subcontracted through a third-party vendor or staffing agency.

     (4)(i) By July 31, 2021, and July 31 of each year thereafter, nursing facilities shall submit

to the secretary or designee a certification that they have complied with the provisions of subsection

(a)(3) of this section with respect to the inflation index applied on October 1. The executive office

of health and human services (EOHHS) shall create the certification form nursing facilities must

complete with information on how each individual eligible employee’s compensation increased,

including information regarding hourly wages prior to the increase and after the compensation

increase, hours paid after the compensation increase, and associated increased payroll taxes. A

collective bargaining agreement can be used in lieu of the certification form for represented

employees. All data reported on the compliance form is subject to review and audit by EOHHS.

The audits may include field or desk audits, and facilities may be required to provide additional

supporting documents including, but not limited to, payroll records.

     (ii) Any facility that does not comply with the terms of certification shall be subjected to a

clawback and twenty-five percent (25%) penalty of the unspent or impermissibly spent funds, paid

by the nursing facility to the state, in the amount of increased reimbursement subject to this

provision that was not expended in compliance with that certification. There shall be created within

the general fund of the state and housed within the budget of the executive office of health and

human services a restricted receipt account entitled “Nursing Facility Rate Adjustment Wage Pass-

through Compliance” for the express purpose of recording receipts and expenditures of the

aforementioned penalty. Funds deposited into the account shall be used for workforce development

and compliance assistance programs.

     (iii) In any calendar year where no inflationary index is applied, eighty percent (80%) of

the base rate staffing adjustment in that calendar year pursuant to subsection (a)(2)(vi) of this

section shall be dedicated to increase compensation for all eligible direct-care workers in the

manner referenced in subsections (a)(3)(i), (a)(3)(i)(A), and (a)(3)(i)(B) of this section.

     (b) Transition to full implementation of rate reform.

     For no less than four (4) years after the initial application of the price-based methodology

described in subsection (a)(2) to payment rates, the executive office of health and human services

shall implement a transition plan to moderate the impact of the rate reform on individual nursing

facilities. The transition shall include the following components:

     (1) No nursing facility shall receive reimbursement for direct-care costs that is less than

the rate of reimbursement for direct-care costs received under the methodology in effect at the time

of passage of this act; for the year beginning October 1, 2017, the reimbursement for direct-care

costs under this provision will be phased out in twenty-five-percent (25%) increments each year

until October 1, 2021, when the reimbursement will no longer be in effect; and

     (2) No facility shall lose or gain more than five dollars ($5.00) in its total, per diem rate the

first year of the transition. An adjustment to the per diem loss or gain may be phased out by twenty-

five percent (25%) each year; except, however, for the years beginning October 1, 2015, there shall

be no adjustment to the per diem gain or loss, but the phase out shall resume thereafter; and

     (3) The transition plan and/or period may be modified upon full implementation of facility

per diem rate increases for quality of care-related measures. Said modifications shall be submitted

in a report to the general assembly at least six (6) months prior to implementation.

     (4) Notwithstanding any law to the contrary, for the twelve-month (12) period beginning

July 1, 2015, Medicaid payment rates for nursing facilities established pursuant to this section shall

not exceed ninety-eight percent (98%) of the rates in effect on April 1, 2015. Consistent with the

other provisions of this chapter, nothing in this provision shall require the executive office to restore

the rates to those in effect on April 1, 2015, at the end of this twelve-month (12) period.

     SECTION 3. Sections 40-8.3-2 and 40-8.3-3 of the General Laws in Chapter 40-8.3 entitled

"Uncompensated Care" are hereby amended to read as follows:

     40-8.3-2. Definitions.

     As used in this chapter:

     (1) “Base year” means, for the purpose of calculating a disproportionate share payment for

any fiscal year ending after September 30, 20245, the period from October 1, 20223, through

September 30, 20234, and for any fiscal year ending after September 30, 20256, the period from

October 1, 20234, through September 30, 20245.

     (2) “Medicaid inpatient utilization rate for a hospital” means a fraction (expressed as a

percentage), the numerator of which is the hospital’s number of inpatient days during the base year

attributable to patients who were eligible for medical assistance during the base year and the

denominator of which is the total number of the hospital’s inpatient days in the base year.

     (3) “Participating hospital” means any nonpsychiatric hospital that:

     (i) Was licensed as a hospital in accordance with chapter 17 of title 23 during the base year

and shall mean the actual facilities and buildings in existence in Rhode Island, licensed pursuant to

§ 23-17-1 et seq. on June 30, 2010, and thereafter any premises included on that license, regardless

of changes in licensure status pursuant to chapter 17.14 of title 23 (hospital conversions) and § 23-

17-6(b) (change in effective control), that provides acute inpatient and/or outpatient care to persons

who require definitive diagnosis and treatment for injury, illness, disabilities, or pregnancy.

Notwithstanding the preceding language, the negotiated Medicaid managed care payment rates for

a court-approved purchaser that acquires a hospital through receivership, special mastership, or

other similar state insolvency proceedings (which court-approved purchaser is issued a hospital

license after January 1, 2013), shall be based upon the newly negotiated rates between the court-

approved purchaser and the health plan, and the rates shall be effective as of the date that the court-

approved purchaser and the health plan execute the initial agreement containing the newly

negotiated rate. The rate-setting methodology for inpatient hospital payments and outpatient

hospital payments set forth in §§ 40-8-13.4(b)(1)(ii)(C) and 40-8-13.4(b)(2), respectively, shall

thereafter apply to negotiated increases for each annual twelve-month (12) period as of July 1

following the completion of the first full year of the court-approved purchaser’s initial Medicaid

managed care contract;

     (ii) Achieved a medical assistance inpatient utilization rate of at least one percent (1%)

during the base year; and

     (iii) Continues to be licensed as a hospital in accordance with chapter 17 of title 23 during

the payment year.

     (4) “Uncompensated-care costs” means, as to any hospital, the sum of: (i) The cost incurred

by the hospital during the base year for inpatient or outpatient services attributable to charity care

(free care and bad debts) for which the patient has no health insurance or other third-party coverage

less payments, if any, received directly from such patients; (ii) The cost incurred by the hospital

during the base year for inpatient or outpatient services attributable to Medicaid beneficiaries less

any Medicaid reimbursement received therefor; and (iii) the sum of subsections (4)(i) and (4)(ii) of

this section shall be offset by the estimated hospital’s commercial equivalent rates state directed

payment for the current SFY in which the disproportionate share hospital (DSH) payment is made.

The sum of subsections (4)(i), (4)(ii), and (4)(iii) of this section shall be multiplied by the

uncompensated care index.

     (5) “Uncompensated-care index” means the annual percentage increase for hospitals

established pursuant to § 27-19-14 [repealed] for each year after the base year, up to and including

the payment year; provided, however, that the uncompensated-care index for the payment year

ending September 30, 2007, shall be deemed to be five and thirty-eight hundredths percent (5.38%),

and that the uncompensated-care index for the payment year ending September 30, 2008, shall be

deemed to be five and forty-seven hundredths percent (5.47%), and that the uncompensated-care

index for the payment year ending September 30, 2009, shall be deemed to be five and thirty-eight

hundredths percent (5.38%), and that the uncompensated-care index for the payment years ending

September 30, 2010, September 30, 2011, September 30, 2012, September 30, 2013, September

30, 2014, September 30, 2015, September 30, 2016, September 30, 2017, September 30, 2018,

September 30, 2019, September 30, 2020, September 30, 2021, September 30, 2022, September

30, 2023, September 30, 2024, September 30, 2025, and September 30, 2026, and September 30,

2027 shall be deemed to be five and thirty hundredths percent (5.30%).

     40-8.3-3. Implementation.

     (a) For federal fiscal year 2024, commencing on October 1, 2023, and ending September

30, 2024, the executive office of health and human services shall submit to the Secretary of the

United States Department of Health and Human Services a state plan amendment to the Rhode

Island Medicaid DSH Plan to provide:

     (1) That the DSH Plan to all participating hospitals, not to exceed an aggregate limit of

$14.8 million, shall be allocated by the executive office of health and human services to the Pool

D component of the DSH Plan; and

     (2) That the Pool D allotment shall be distributed among the participating hospitals in direct

proportion to the individual participating hospital’s uncompensated-care costs for the base year,

inflated by the uncompensated-care index to the total uncompensated-care costs for the base year

inflated by the uncompensated-care index for all participating hospitals. The disproportionate share

payments shall be made on or before June 30, 2024, and are expressly conditioned upon approval

on or before June 23, 2024, by the Secretary of the United States Department of Health and Human

Services, or their authorized representative, of all Medicaid state plan amendments necessary to

secure for the state the benefit of federal financial participation in federal fiscal year 2024 for the

disproportionate share payments.

     (b) (a) For federal fiscal year 2025, commencing on October 1, 2024, and ending on

September 30, 2025, the executive office of health and human services shall submit to the Secretary

of the United States Department of Health and Human Services a state plan amendment to the

Rhode Island Medicaid DSH plan to provide:

     (1) The creation of Pool C which allots no more than twelve million nine hundred thousand

dollars ($12,900,000) to Medicaid eligible government-owned hospitals;

     (2) That the DSH plan to all participating hospitals, not to exceed an aggregate limit of

$27.7 million, shall be allocated by the executive office of health and human services to the Pool

C and D components of the DSH plan;

     (3) That the Pool D allotment shall be distributed among the participating hospitals in direct

proportion to the individual participating hospital’s uncompensated-care costs for the base year,

inflated by the uncompensated-care index to the total uncompensated-care costs for the base year

inflated by the uncompensated-care index of all participating hospitals. The disproportionate share

payments shall be made on or before June 30, 2025, and are expressly conditioned upon approval

on or before June 23, 2025, by the Secretary of the United States Department of Health and Human

Services, or their authorized representative, of all Medicaid state plan amendments necessary to

secure for the state the benefit of federal financial participation in federal fiscal year 2025 for the

disproportionate share payments; and

     (4) That the Pool C allotment shall be distributed among the participating hospitals in direct

proportion to the individual participating hospital’s uncompensated-care costs for the base year,

inflated by the uncompensated-care index to the total uncompensated-care cost for the base year

inflated by the uncompensated-care index of all participating hospitals. The disproportionate share

payments shall be made on or before June 30, 2025, and are expressly conditioned upon approval

on or before June 23, 2025, by the Secretary of the United States Department of Health and Human

Services, or their authorized representative, of all Medicaid state plan amendments necessary to

secure for the state the benefit of federal financial participation in federal fiscal year 2025 for the

disproportionate share payments.

     (c) (b) For federal fiscal year 2026, commencing on October 1, 2025, and ending on

September 30, 2026, the executive office of health and human services shall submit to the Secretary

of the United States Department of Health and Human Services a state plan amendment to the

Rhode Island Medicaid DSH plan to provide:

     (1) That the DSH plan to all participating hospitals, not to exceed an aggregate limit of

$13.9 million, shall be allocated by the executive office of health and human services to the Pool

C and D components of the DSH plan. Pool C shall not exceed an aggregate limit of $12.9 million.

Pool D shall not exceed an aggregate limit of $1.0 million;

     (2) That the Pool C allotment shall be distributed among the participating hospitals in direct

proportion to the individual participating hospital’s uncompensated-care costs for the base year,

inflated by the uncompensated-care index to the total uncompensated-care cost for the base year

inflated by the uncompensated-care index of all participating hospitals. The disproportionate share

payments shall be made on or before June 30, 2026, and are expressly conditioned upon approval

on or before June 23, 2026, by the Secretary of the United States Department of Health and Human

Services, or their authorized representative, of all Medicaid state plan amendments necessary to

secure for the state the benefit of federal financial participation in federal fiscal year 2026 for the

disproportionate share payments; and

     (3) That the Pool D allotment shall be distributed among the participating hospitals in direct

proportion to the individual participating hospital’s uncompensated-care costs for the base year,

inflated by the uncompensated-care index to the total uncompensated-care costs for the base year

inflated by the uncompensated-care index of all participating hospitals. The disproportionate share

payments shall be made on or before June 30, 2026, and are expressly conditioned upon approval

on or before June 23, 2026, by the Secretary of the United States Department of Health and Human

Services, or their authorized representative, of all Medicaid state plan amendments necessary to

secure for the state the benefit of federal financial participation in federal fiscal year 2026 for the

disproportionate share payments.

     (c) For federal fiscal year 2027, commencing on October 1, 2026, and ending on September

30, 2027, the DSH plan for all participating hospitals shall not exceed an aggregate limit of $23.9

million and shall be allocated by the executive office of health and human services to the Pool C

and D components of the DSH plan. The Pool C component of the DSH plan shall not exceed an

aggregate limit of $12.9 million. The Pool D component of the DSH plan shall not exceed an

aggregate limit of $11.0 million.

     (1) The Pool C allotment shall be distributed among the participating hospitals in direct

proportion to each individual participating hospital’s uncompensated-care costs for the base year,

inflated by the uncompensated-care index as described in §40-8.3-2(5). The DSH payments shall

be made on or before June 30, 2027; and,

     (2) The Pool D allotment shall be distributed among the participating hospitals in direct

proportion to the individual participating hospital’s uncompensated-care costs for the base year,

inflated by the uncompensated-care index as described in §40-8.3-2(5). The disproportionate share

payments shall be made on or before June 30, 2027.

     (d) No provision is made pursuant to this chapter for disproportionate-share hospital

payments to participating hospitals for uncompensated-care costs related to graduate medical

education programs.

     (e) The executive office of health and human services is directed, on at least a monthly

basis, to collect patient-level uninsured information, including, but not limited to, demographics,

services rendered, and reason for uninsured status from all hospitals licensed in Rhode Island.

     (f) [Deleted by P.L. 2019, ch. 88, art. 13, § 6.]

     SECTION 4. Section 42-7.2-5 of the General Laws in Chapter 42-7.2 entitled "Office of

Health and Human Services” is hereby amended to read as follows:

     42-7.2-5. Duties of the secretary.

     The secretary shall be subject to the direction and supervision of the governor for the

oversight, coordination, and cohesive direction of state-administered health and human services

and in ensuring the laws are faithfully executed, notwithstanding any law to the contrary. In this

capacity, the secretary of the executive office of health and human services (EOHHS) shall be

authorized to:

     (1) Coordinate the administration and financing of healthcare benefits, human services, and

programs including those authorized by the state’s Medicaid section 1115 demonstration waiver

and, as applicable, the Medicaid state plan under Title XIX of the U.S. Social Security Act.

However, nothing in this section shall be construed as transferring to the secretary the powers,

duties, or functions conferred upon the departments by Rhode Island public and general laws for

the administration of federal/state programs financed in whole or in part with Medicaid funds or

the administrative responsibility for the preparation and submission of any state plans, state plan

amendments, or authorized federal waiver applications, once approved by the secretary.

     (2) Serve as the governor’s chief advisor and liaison to federal policymakers on Medicaid

reform issues as well as the principal point of contact in the state on any such related matters.

     (3)(i) Review and ensure the coordination of the state’s Medicaid section 1115

demonstration waiver requests and renewals as well as any initiatives and proposals requiring

amendments to the Medicaid state plan or formal amendment changes, as described in the special

terms and conditions of the state’s Medicaid section 1115 demonstration waiver with the potential

to affect the scope, amount, or duration of publicly funded healthcare services, provider payments

or reimbursements, or access to or the availability of benefits and services as provided by Rhode

Island general and public laws. The secretary shall consider whether any such changes are legally

and fiscally sound and consistent with the state’s policy and budget priorities. The secretary shall

also assess whether a proposed change is capable of obtaining the necessary approvals from federal

officials and achieving the expected positive consumer outcomes. Department directors shall,

within the timelines specified, provide any information and resources the secretary deems necessary

in order to perform the reviews authorized in this section.

     (ii) Direct the development and implementation of any Medicaid policies, procedures, or

systems that may be required to assure successful operation of the state’s health and human services

integrated eligibility system and coordination with HealthSource RI, the state’s health insurance

marketplace.

     (iii) Beginning in 2015, conduct on a biennial basis a comprehensive review of the

Medicaid eligibility criteria for one or more of the populations covered under the state plan or a

waiver to ensure consistency with federal and state laws and policies, coordinate and align systems,

and identify areas for improving quality assurance, fair and equitable access to services, and

opportunities for additional financial participation.

     (iv) Implement service organization and delivery reforms that facilitate service integration,

increase value, and improve quality and health outcomes.

     (4) Beginning in 2020, prepare and submit to the governor, the chairpersons of the house

and senate finance committees, the caseload estimating conference, and to the joint legislative

committee for health-care oversight, by no later than September 15 of each year, a comprehensive

overview of all Medicaid expenditures outcomes, administrative costs, and utilization rates. The

overview shall include, but not be limited to, the following information:

     (i) Expenditures under Titles XIX and XXI of the Social Security Act, as amended;

     (ii) Expenditures, outcomes, and utilization rates by population and sub-population served

(e.g., families with children, persons with disabilities, children in foster care, children receiving

adoption assistance, adults ages nineteen (19) to sixty-four (64), and elders);

     (iii) Expenditures, outcomes, and utilization rates by each state department or other

municipal or public entity receiving federal reimbursement under Titles XIX and XXI of the Social

Security Act, as amended;

     (iv) Expenditures, outcomes, and utilization rates by type of service and/or service

provider;

     (v) Expenditures by mandatory population receiving mandatory services and, reported

separately, optional services, as well as optional populations receiving mandatory services and,

reported separately, optional services for each state agency receiving Title XIX and XXI funds; and

     (vi) Information submitted to the Centers for Medicare & Medicaid Services for the

mandatory annual state reporting of the Core Set of Children’s Health Care Quality Measures for

Medicaid and Children’s Health Insurance Program, behavioral health measures on the Core Set of

Adult Health Care Quality Measures for Medicaid and the Core Sets of Health Home Quality

Measures for Medicaid to ensure compliance with the Bipartisan Budget Act of 2018, Pub. L. No.

115-123.

     The directors of the departments, as well as local governments and school departments,

shall assist and cooperate with the secretary in fulfilling this responsibility by providing whatever

resources, information, and support shall be necessary.

     (5) Resolve administrative, jurisdictional, operational, program, or policy conflicts among

departments and their executive staffs and make necessary recommendations to the governor.

     (6) Ensure continued progress toward improving the quality, the economy, the

accountability, and the efficiency of state-administered health and human services. In this capacity,

the secretary shall:

     (i) Direct implementation of reforms in the human resources practices of the executive

office and the departments that streamline and upgrade services, achieve greater economies of scale

and establish the coordinated system of the staff education, cross-training, and career development

services necessary to recruit and retain a highly-skilled, responsive, and engaged health and human

services workforce;

     (ii) Encourage EOHHS-wide consumer-centered approaches to service design and delivery

that expand their capacity to respond efficiently and responsibly to the diverse and changing needs

of the people and communities they serve;

     (iii) Develop all opportunities to maximize resources by leveraging the state’s purchasing

power, centralizing fiscal service functions related to budget, finance, and procurement,

centralizing communication, policy analysis and planning, and information systems and data

management, pursuing alternative funding sources through grants, awards, and partnerships and

securing all available federal financial participation for programs and services provided EOHHS-

wide;

     (iv) Improve the coordination and efficiency of health and human services legal functions

by centralizing adjudicative and legal services and overseeing their timely and judicious

administration;

     (v) Facilitate the rebalancing of the long-term system by creating an assessment and

coordination organization or unit for the expressed purpose of developing and implementing

procedures EOHHS-wide that ensure that the appropriate publicly funded health services are

provided at the right time and in the most appropriate and least restrictive setting;

     (vi) Strengthen health and human services program integrity, quality control and

collections, and recovery activities by consolidating functions within the office in a single unit that

ensures all affected parties pay their fair share of the cost of services and are aware of alternative

financing;

     (vii) Assure protective services are available to vulnerable elders and adults with

developmental and other disabilities by reorganizing existing services, establishing new services

where gaps exist, and centralizing administrative responsibility for oversight of all related

initiatives and programs.

     (7) Prepare and integrate comprehensive budgets for the health and human services

departments and any other functions and duties assigned to the office. The budgets shall be

submitted to the state budget office by the secretary, for consideration by the governor, on behalf

of the state’s health and human services agencies in accordance with the provisions set forth in §

35-3-4.

     (8) Utilize objective data to evaluate health and human services policy goals, resource use

and outcome evaluation and to perform short and long-term policy planning and development.

     (9) Establish an integrated approach to interdepartmental information and data

management that complements and furthers the goals of the unified health infrastructure project

initiative and that will facilitate the transition to a consumer-centered integrated system of state-

administered health and human services.

     (10) At the direction of the governor or the general assembly, conduct independent reviews

of state-administered health and human services programs, policies, and related agency actions and

activities and assist the department directors in identifying strategies to address any issues or areas

of concern that may emerge thereof. The department directors shall provide any information and

assistance deemed necessary by the secretary when undertaking such independent reviews.

     (11) Provide regular and timely reports to the governor and make recommendations with

respect to the state’s health and human services agenda.

     (12) Employ such personnel and contract for such consulting services as may be required

to perform the powers and duties lawfully conferred upon the secretary.

     (13) Assume responsibility for complying with the provisions of any general or public law

or regulation related to the disclosure, confidentiality, and privacy of any information or records,

in the possession or under the control of the executive office or the departments assigned to the

executive office, that may be developed or acquired or transferred at the direction of the governor

or the secretary for purposes directly connected with the secretary’s duties set forth herein.

     (14) Hold the director of each health and human services department accountable for their

administrative, fiscal, and program actions in the conduct of the respective powers and duties of

their agencies.

     (15) Identify opportunities for inclusion with the EOHHS’ October 1, 2023, budget

submission, to remove fixed eligibility thresholds for programs under its purview by establishing

sliding scale decreases in benefits commensurate with income increases up to four hundred fifty

percent (450%) of the federal poverty level. These shall include but not be limited to, medical

assistance, childcare assistance, and food assistance.

     (16) Ensure that insurers minimize administrative burdens on providers that may delay

medically necessary care, including requiring that insurers do not impose a prior authorization

requirement for any admission, item, service, treatment, or procedure ordered by an in-network

primary care provider. Provided, the prohibition shall not be construed to prohibit prior

authorization requirements for prescription drugs. Provided further, that as used in this subsection

(16) of this section, the terms “insurer,” “primary care provider,” and “prior authorization” means

the same as those terms are defined in § 27-18.9-2.

     (17) The secretary shall convene, in consultation with the governor, an advisory working

group to assist in the review and analysis of potential impacts of any adopted federal actions related

to Medicaid programs. The working group shall develop options for administrative action or

general assembly consideration that may be needed to address any federal funding changes that

impact Rhode Island’s Medicaid programs.

     (i) The advisory working group may include, but not be limited to, the secretary of health

and human services, director of management and budget, and designees from the following: state

agencies, businesses, healthcare, public sector unions, and advocates.

     (ii) As soon as practicable after the enactment federal budget for fiscal year 2026, but no

later than October 31, 2025, the advisory working group shall forward a report to the governor,

speaker of the house, and president of the senate containing the findings, recommendations and

options for consideration to become compliant with federal changes prior to the governor’s budget

submission pursuant to § 35-3-7.

     (18) The secretary shall implement, in coordination with the health insurance

commissioner, the Achieving Healthcare Efficiency through Accountable Design (AHEAD) Model

Grant Program and produce a report to the governor and the general assembly outlining the

program’s activities. The report, due no later than October 31, 2026, and annually thereafter by

October 31 for the duration of the state’s participation in the grant, should address, at minimum:

     (i) a description of activities and funding uses during the grant year;

     (ii) the legislative authority, including budgetary authority, required to implement changes

to the Rhode Island Medical Assistance program;

     (ii) stakeholder interest and participation in the model; and

     (iv) overall long-term value of implementing the alternative payment models required by

the AHEAD model.

SECTION 5. Chapter 42-72 of the General Laws entitled “Department of Children, Youth

and Families” is hereby amended by adding thereto the following section:

42-72-37. Family Care Community Partnerships.

(a) As used in this subsection, “family care community partnership” (FCCP) means a

specific, community-based prevention service that an agency or entity provides to children and

families through a Medicaid certification, department license, or contract with the department.

(b) There are hereby established five (5) FCCP catchment regions to serve residents of a

specific area within the state, as follows:

(1) West Urban Core: the cities of Providence and Cranston;

(2) East Urban Core: the cities of East Providence, Central Falls, and Pawtucket;

(3) East Bay: the towns of Barrington, Bristol, Jamestown, Little Compton, Middletown,

Portsmouth, Tiverton, and Warren, and the city of Newport;

(4) Washington and Kent Counties: the towns of Charlestown, Coventry, East Greenwich,

Exeter, Hopkinton, Narragansett, New Shoreham, North Kingstown, Richmond, South Kingstown,

West Greenwich, West Warwick, and Westerly, and the city of Warwick; and

(5) Northern Rhode Island: the towns of Burrillville, Cumberland, Foster, Glocester,

Johnston, Lincoln, North Providence, North Smithfield, Scituate, Smithfield, and the city of

Woonsocket.

(c) Exactly one FCCP shall be permitted to operate in each region set forth in subsection

(b) of this section.

     SECTION 6. Rhode Island Medicaid Reform Act of 2008 Resolution.

     WHEREAS, the General Assembly enacted Chapter 12.4 of Title 42 entitled “The Rhode

Island Medicaid Reform Act of 2008”; and  

      WHEREAS, a legislative enactment is required pursuant to Rhode Island General Laws

section 42-12.4-1, et seq.; and 

  WHEREAS, Rhode Island General Laws section 42-7.2-5(3)(i) provides that the secretary

of the executive office of health and human services is responsible for the review and coordination

of any Medicaid section 1115 demonstration waiver requests and renewals as well as any initiatives

and proposals requiring amendments to the Medicaid state plan or category II or III changes as

described in the demonstration, “with potential to affect the scope, amount, or duration of publicly-

funded health care services, provider payments or reimbursements, or access to or the availability

of benefits and services provided by Rhode Island general and public laws”; and 

     WHEREAS, in pursuit of a more cost-effective consumer choice system of care that is

fiscally sound and sustainable, the secretary requests legislative approval of the following proposals

to amend the demonstration; and

     WHEREAS, implementation of adjustments may require amendments to the Rhode

Island’s Medicaid state plan and/or section 1115 waiver under the terms and conditions of the

demonstration. Further, adoption of new or amended rules, regulations and procedures may also

be required:

     (a) Inpatient and Outpatient Hospital Rate Increase Alignment with State Revenue Growth.

The executive office of health and human services will pursue and implement any state plan

amendments needed to limit rate increases for inpatient and outpatient hospital services in SFY

2027 to the anticipated rate of growth of state tax revenue, 2.5 percent.

     (b) Nursing Facility Rate Increase Alignment with State Revenue Growth. The executive

office of health and human services will pursue and implement any state plan amendments needed

to align rate increases for nursing facilities in SFY 2027 to the anticipated rate of growth of state

tax revenue, 2.5 percent.

     (c) Federally Qualified Health Center Rate Increase Alignment with State Revenue

Growth. The secretary of the executive office of health and human services will pursue and

implement any amendments needed to the Principles of Reimbursement for Federally Qualified

Health Centers (FQHC) needed to align rate increases for FQHC services in SFY 2027 to the

anticipated rate of growth of state tax revenue, 2.5 percent.

     (d) Substance Abuse Residential Services Rates. The secretary of the executive office of

health and human services will pursue and implement any state plan amendments needed to

eliminate annual rate increases for substance abuse residential services.

     (e) Children’s Services Rate Setting. The secretary of the executive office of health and

human services is authorized to pursue and implement any waiver amendments, state plan

amendments, and/or changes to the applicable department’s rules, regulations, and procedures

required to implement reimbursement rates resulting from the Children's Services Rate Setting

project.

     (f) Provider Reimbursement Rates. The secretary of the executive office of health and

human services is authorized to pursue and implement any waiver amendments, state plan

amendments, and/or changes to the applicable department’s rules, regulations, and procedures

required to implement updates to Medicaid provider reimbursement rates consisting of rate

increases limited to the lower amount of one half (1/2) of the increases recommended or one

hundred percent (100%) of the Medicare rates identified in the Social and Human Service Programs

Review Final Report produced by the office of the health insurance commissioner pursuant to

Rhode Island General Laws section 42-14.5-3(t)(2)(x), effective October 1, 2026.

     (g) Glucagon-like Peptide-1 (GLP-1) Coverage. The secretary of the executive office of

health and human services is authorized to pursue and implement any waiver amendments, state

plan amendments, and/or changes to the applicable department’s rules, regulations, and procedures

required to remove coverage for GLP-1 medications, except if prescribed to treat type 2 diabetes.

     (h) Federal Financing Opportunities.  The executive office of health and human services

proposes that it shall review Medicaid requirements and opportunities under the U.S. Patient

Protection and Affordable Care Act of 2010 (PPACA) and various other recently enacted federal

laws and pursue any changes in the Rhode Island Medicaid program that promote, increase and

enhance service quality, access and cost-effectiveness that may require a Medicaid state plan

amendment or amendment under the terms and conditions of Rhode Island’s section 1115 waiver,

its successor, or any extension thereof.  Any such actions by the executive office of health and

human services shall not have an adverse impact on beneficiaries or cause there to be an increase

in expenditures beyond the amount appropriated for state fiscal year 2027.    

     Now, therefore, be it:

     RESOLVED, that the General Assembly hereby approves the above-referenced proposals;

and be it further;

     RESOLVED, that the secretary of the executive office of health and human services is

authorized to pursue and implement any waiver amendments, state plan amendments, and/or

changes to the applicable department’s rules, regulations and procedures approved herein and as

authorized by chapter 12.4 of title 42; and be it further; 

     RESOLVED, that this Joint Resolution shall take effect on July 1, 2026.  

     SECTION 7. This article shall take effect upon passage, except section 6 which shall take

effect on July 1, 2026.