WeVote
Log In

Bill

Bill

SB 2880

AN ACT RELATING TO HUMAN SERVICES -- MEDICAL ASSISTANCE

2026 Regular Session Introduced by Lou DiPalma

Rhode Island shifts Medicaid nursing facility payments to a price-based rate that accounts for resident acuity and funds direct-care staffing increases, with a four-year transition

05/05/2026 Committee recommended measure be held for further study
0
WeVote Research Nonpartisan
Bill Summary · SB 2880

Summary of SB 2880 (Rhode Island, 2026) — AN ACT RELATING TO HUMAN SERVICES — MEDICAL ASSISTANCE

Purpose and intent

SB 2880 seeks to reform how Medicaid payments to nursing facilities are determined and reimbursed in Rhode Island. The bill directs the Executive Office of Health and Human Services (EOHHS) to shift from the current cost-based payment methodology to a price-based (rate) methodology that accounts for resident acuity, facility performance, and inflation. The overarching goals include ensuring rates are reasonable and adequate to cover costs, promoting staffing and direct-care compensation, and implementing a structured transition to minimize financial disruption for facilities.

Key provisions and changes

1) Rate reform for nursing facilities (40-8-19)

  • Establishes that Medicaid payments to nursing facilities must be “reasonable and adequate” to cover costs for efficiently operated facilities, consistent with federal law (42 U.S.C. § 1396a(a)(13)).
  • Directs EOHHS to adopt or update the reimbursement framework to align with a price-based methodology (instead of current cost-based rates), incorporating:
    • A direct-care rate adjusted for resident acuity.
    • An indirect-care and other direct-care rate as a base per diem for all facilities.
    • Periodic revisions to reflect changes in direct and indirect costs, using final cost-report data (with specific update triggers dated Oct 2024 and Oct 2027).
    • Application of a fair-rental value system.
    • Application of a pass-through system (likely for specific costs or incentives).
    • Annual inflation index adjustments based on recognized national nursing-home inflation, with a history of prior adjustments (notably delays in certain years) and transition adjustments.

2) Direct-care staffing and compensation provisions

  • Beginning Oct 1, 2025, a base-rate staffing adjustment is set at 3%, with 100% of this amount required to be spent by facilities to increase compensation, wages, benefits, and related employer costs for eligible direct-care staff (as defined broadly to include RNs, LPNs, CNAs, therapists, certain social/mental health roles, housekeeping, dietary, etc., excluding certain exempt employees and contracted staff).
  • For 2016 inflation index-driven increases, 85-85% (and later 80%) of the inflation-derived increases must be directed to direct-care compensation, with detailed reporting and certification requirements by July 31 of applicable years.

3) Compliance certifications and penalties

  • Facilities must certify compliance with compensation-increase provisions (with an EOHHS-created form and possible use of collective bargaining agreements). Data submitted is subject to audit.
  • Non-compliance triggers clawbacks and penalties (a 25% penalty of unspent funds related to the increased reimbursement not spent on compliance).

4) Transition to full implementation

  • A four-year transition plan from the initial price-based methodology to moderate the impact on facilities.
  • Protections to ensure facilities do not fall below the prior direct-care cost reimbursement during the transition (gradual phasing of changes).
  • Caps on year-to-year rate changes during transition (no more than +/- $5 per diem in the first transition year, with gradual phasing).

5) Caps and temporary limits

  • In a calendar year with no inflation index applied, 80% of the base-rate staffing adjustment must still be used to increase direct-care compensation.

6) Effective date

  • The act takes effect upon passage.

Who is affected

  • Nursing facilities certified to participate in Title XIX Medicaid payments in Rhode Island.
  • Facility administrators and financial officers (for rate setting, cost reporting, and compliance certification).
  • Direct-care workers (RNs, LPNs, CNAs, therapists, housekeeping, dietary and related staff), whose compensation is targeted by the staffing adjustments.
  • EOHHS and its staff responsible for rate setting, audits, and oversight.

Procedural/Timeline aspects

  • Transition period: at least four years from initial application of price-based rates.
  • Specific phased adjustments tied to cost-report data with triggers in Oct 2024 and Oct 2027 for rate revisions.
  • Certifications due by July 31 of applicable years; audits and potential clawbacks for non-compliance.
  • Certain inflation-index adjustments (and their application) have historical timing notes that influence implementation.

Summary note

SB 2880 reorganizes Medicaid nursing facility reimbursements toward a price-based system with an emphasis on resident acuity and direct-care staffing investments, backed by certification and audit requirements, and a managed transition to cushion facilities from abrupt rate changes.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.