HMO assessment program approved

Lawmakers gave final approval April 3 to a bill intended to increase Medicaid provider reimbursement rates without the use of general fund dollars.

Modeled on a proposal approved by lawmakers last year to levy an assessment on all Nebraska hospitals, LB527, introduced by North Platte Sen. Mike Jacobson, will use a similar mechanism to levy an assessment on the state’s health maintenance organizations.

Under the bill, the state Department of Health and Human Services is required to submit a state plan amendment to the Centers for Medicare and Medicaid Services by Aug. 1, 2025.

If approved, the state plan amendment will authorize collection of a 6% tax on all non-Medicare premiums written in Nebraska under an HMO certificate of authority, to be collected by the state Department of Insurance beginning Jan. 1, 2026.

Revenue generated by the tax will be remitted to a newly created Medicaid Access and Quality Fund. DHHS will use the fund to leverage federal matching dollars to enhance Medicaid reimbursement rates paid to nonhospital providers of physical health services, with an emphasis on evaluation and management, labor and delivery and rural health services.

The fund also will be used to pay a monthly per-member fee of at least $75 to qualified primary care providers who meet criteria to serve as a primary care medical home for target populations. Any remaining funds will be used within the state’s Medicaid and CHIP programs.

LB527 passed on a vote of 47-0 and takes effect immediately.