Provider rate bills considered

The Appropriations Committee heard testimony Jan. 31 on four bills aimed at increasing rates for providers of behavioral health, developmental disability, child welfare and nursing and assisted living facility services.

LB762, sponsored by Adams Sen. Myron Dorn, states legislative intent to increase the rate for Nebraska behavioral health service providers by 10 percent in fiscal year 2022-23. The state Department of Health and Human Services estimates the bill’s cost at $9 million in general funds and $15.3 million in federal funds.

Dorn said the state’s own studies have shown that behavioral health rates cover only 30 percent of the cost of providing services. The bill would help “shore up” Nebraska’s Medicaid system and help professionals continue to do critical front-line work, he said.

“Our providers in both urban and rural communities cannot continue to meet the need, let alone balance their books or consider expanding services,” Dorn said.

Jon Day, executive director of Blue Valley Behavioral Health, testified in favor of the bill on behalf of the Nebraska Association of Behavioral Health Organizations.

Prior to 2020, Day said, the number of youth and adults seeking behavioral health services at Blue Valley was rising at approximately 4 percent per year. That rate grew by 20 percent during the height of the pandemic, he said, and is on pace to be even higher this fiscal year.

“That’s a lot more people dealing with problems such as anxiety, depression, family conflict, trauma, substance abuse and [other behavioral health issues],” Day said. “People are truly hurting in a way that we’ve never experienced before.”

In addition, he said, the cost to provide behavioral health services has “skyrocketed” due to pandemic related increases in operational costs.

Also testifying in support was Katie McLeese Stephenson, executive director of Lincoln behavioral health provider HopeSpoke. She said her organization’s outpatient waiting list has increased 400 percent since the start of the pandemic, and 10 percent of staff positions are vacant despite wage increases and bonuses.

“We’re unable to operate all of our programs at full capacity,” McLeese Stephenson said.

LB1164, sponsored by Lincoln Sen. Anna Wishart, states legislative intent to increase certain child welfare service provider rates by 15 percent beginning July 1, 2022. The bill specifies that the intention is for the increase to be in addition to any other increase provided in state law.

The department estimates the cost to implement the bill’s provisions at approximately $18 million in general funds and $4.8 million in federal funds in FY2022-23.

The governor has provided a temporary, one-year rate increase for some child welfare services, Wishart said, but more services need to be covered and the increase needs to be permanent.

Representing CEDARS Home for Children, a child welfare service provider, Jim Blue testified in support of LB1164. Child welfare is the responsibility of all Nebraskans, he said, and the state’s history of failed privatization attempts are evidence that services should not focus on who is able to provide them at the cheapest cost.

“The current [reimbursement] rate for our nationally accredited emergency shelter — which is one of the few remaining in the state — is approximately half of our actual cost of care,” Blue said. “And we were full this morning.”

Mike Betzold, testifying on behalf of the Nebraska Alliance of Family and Child Service Providers, also supported the bill. Child welfare service providers in rural areas are refusing to take cases because the state reimbursement rate is less than the cost of services, he said.

“We can no longer do what DHHS is asking us to do based on what they are paying,” Betzold said. “And families cannot wait years for the state to figure out what to do and how much to pay.”

Two additional bills discussed are intended to prevent a “cliff effect” when existing temporary state supports expire at the end of the current fiscal year.

LB893, sponsored by Gering Sen. John Stinner, would appropriate $26.4 million in general funds in FY2022-23 to DHHS to fund a developmental disability provider rate increase and direct $41.3 million in federal funds to the department for the same purpose. The bill would result in a 15 percent base rate increase, Stinner said.

The one-time rate increase would help stabilize developmental disability provider rates when the current temporary rate increase expires, Stinner said. Even with the pandemic subsidy, he said, developmental disability providers are unable to compete for employees in the larger job market.

“The developmental disability system is currently 35 percent short staffed on front-line positions, creating a massive amount of overtime,” he said. “This leads to a lack of services provided to families and unsafe conditions for all involved.”

Sara Bartruff, representing MOSAIC and the Nebraska Association of Service Providers, testified in support of LB893. Providers across the state are posting significant losses because they could not provide services in congregate settings during the pandemic and some family members were afraid to have providers entering their homes, she said.

LB989, also sponsored by Stinner, would appropriate $26 million in general funds and $60.5 million in federal funds in FY2022-23 for nursing facility provider rates. The bill also states that the increase is to be combined with existing appropriations to form the base on which future appropriations are calculated. The rate adjustment would begin on July 1, 2022.

Kierstin Reed, CEO of LeadingAge Nebraska, testified in support of LB989. Many skilled nursing facilities in rural Nebraska are in danger of closing, she said, and are being forced to accept fewer Medicaid patients due to low reimbursement rates.

“Workforce and recruitment have been consistent problem in long-term care — partially due to underfunding by Medicaid — leaving providers generally not able to attract and retain top talent,” Reed said. “COVID-19 has only exacerbated an incredibly difficult situation and the tightening of the labor market has really tipped us to this point.”

Testifying in opposition to the proposals, Terry Jessen said the media has done a disservice by suggesting that Nebraska has “extra” money and urged senators to show “fiscal restraint” in the face of requests from providers for additional funds.

“Rather than looking for ways to spend, spend, spend — we should be looking for ways to return money to the taxpayer where it [came] from,” Jessen said.

The committee took no immediate action on any of the bills.