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HB 8561

AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- MEDICAID PROGRAM FUNDING AND REALLOCATION OF ENROLLMENT SAVINGS

2026 Regular Session Introduced by Stephen Casey and 1 co-sponsor

Rhode Island will reinvest enrollment-driven Medicaid savings into higher provider reimbursements, stabilizing access to care as enrollment falls.

05/15/2026 Introduced, referred to House Finance
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WeVote Research Nonpartisan
Bill Summary · HB 8561

Overview

HB 8561 (Rhode Island, 2026) establishes a dedicated mechanism to retain and reinvest Medicaid enrollment-driven savings into provider reimbursements. The bill creates a new policy framework under a separate chapter (Chapter 169) within Title 42 (State Affairs and Government) to ensure that any federal/state savings from reduced Medicaid enrollment are not used to offset deficits, but instead bolster providers' reimbursement rates. It takes effect July 1, 2026.

Purpose and intent

  • Preserve access to healthcare amid anticipated Medicaid enrollment reductions due to federal policy changes.
  • Stabilize the healthcare delivery system by preventing increased uncompensated care and provider financial strain.
  • Reinvest savings generated by enrollment reductions back into the Medicaid program through higher provider payments, thereby supporting hospitals, clinics, and other care providers.

Key provisions

1) Definitions

  • “Enrollment-driven savings” are defined as the reduction in Medicaid expenditures in the fiscal year ending June 30, 2028, attributable to decreases in enrollment, as estimated by the Rhode Island caseload estimating conference (May meeting).

2) Reallocation of savings

  • All enrollment-driven savings must be retained within the Medicaid program and may not be used for deficit reduction or other purposes.
  • Savings must be reallocated exclusively to increase Medicaid provider reimbursement rates for:
    • Hospital inpatient services
    • Hospital outpatient services
    • Physician services
    • Federally Qualified Health Center (FQHC) services
  • These funds are additive; they cannot supplant, replace, or offset existing appropriations, rate structures, or payment methodologies as of June 30, 2026.

3) Implementation

  • Rhode Island Executive Office of Health and Human Services (EOHHS) must:
    • Adjust fee-for-service Medicaid reimbursement rates as needed.
    • Amend managed care contracts or implement targeted payments to ensure rate increases are reflected in provider payments, with a minimum pass-through rate to providers of 90% of each rate increase.
    • Submit any required state plan amendments, waivers, or federal approvals to the Centers for Medicare & Medicaid Services (CMS).

4) Reporting and compliance

  • EOHHS must annually report to the General Assembly by October 31, including:
    • How enrollment-driven savings were calculated (methodology and actuarial assumptions).
    • Details of provider rate adjustments by type and setting.
    • Amount of federal financial participation generated by rate investments.
    • Status of required state plan amendments, waivers, or approvals (pending/denied).
    • Compliance by managed care organizations with the provider pass-through requirements.

Affected parties and impacts

  • Medicaid-eligible Rhode Islanders: Indirect effect via potentially more stable access to covered services due to maintained provider capacity and financing.
  • Healthcare providers (hospitals, physicians, FQHCs): Direct positive impact through targeted increases in reimbursement rates, funded by enrollment-driven savings.
  • Managed care organizations (MCOs): Must implement rate pass-throughs and align contracts to reflect rate increases.
  • State government (EOHHS/General Assembly): Responsible for estimating savings, administering rate changes, pursuing necessary federal approvals, and annual reporting.

Timeline and procedural aspects

  • Effective date: July 1, 2026.
  • Implementation window for rate changes: Within 180 days of each rate adjustment.
  • Annual reporting: Due by October 31 each year, starting after the first effective year.
  • Federal approvals: State plan amendments or waivers may be required and must be pursued as part of implementation.

Summary

HB 8561 creates a dedicated funding mechanism to lock in Medicaid enrollment-related savings and reinvest them as higher provider reimbursements (hospitals, physicians, FQHCs) within the Medicaid program. It aims to maintain access to care amid enrollment declines by preserving provider financial stability and ensuring savings are used for targeted rate increases rather than deficit reduction. The bill mandates rate adjustments, pass-through requirements, federal approvals where needed, and annual transparency reporting.

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

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