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HB 1942

Contracts; goods or services; total cost disclosure; effective date.

2025 Regular Session Introduced by Michelle McCane

The bill requires capitation payments to HCBS providers to meet minimum rates set by a rate study due by Oct 1, 2025, with increases potentially phased in if costs rise.

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Bill Summary · HB 1942

Summary — HB 1942 (text provided)

Note on source material and status
- The text provided for HB 1942 is an Arkansas bill from the 95th General Assembly (Regular Session, 2025) that would require certain reimbursement rates for home- and community‑based services (HCBS) paid by risk‑based provider organizations.
- The metadata you supplied contains conflicting titles and procedural history (including references to an Illinois bill with the same number and other mixed entries). The top of your packet lists the bill status as “Died In Committee,” but other entries show passing/enactment steps. This summary describes the substantive provisions in the Arkansas bill text included; verify final status and enactment with the Arkansas legislative information system for authoritative procedural history.

Purpose / intent
- To ensure that capitation payments to risk‑based provider organizations include an allowance sufficient to pay direct HCBS providers rates no less than amounts determined by a required rate study, and to define procedures, timelines, and protections for setting those minimum rates.

Key provisions
1. Amendments to Arkansas Code § 20-77-2706 (risk‑based provider organization duties)
- Reimbursement rates paid by a risk‑based provider organization to direct service providers:
- May be determined by mutual agreement between the organization and the direct service provider and may disregard DHS-established Medicaid provider rates — provided the agreed rate is not less than the minimum rates established under new § 20‑77‑2709.
- Must assure efficiency, economy, quality, and equal access for Medicaid enrollees as required by law.
- Parallel language added for policies and procedures governing direct service providers.

  1. New section added — Arkansas Code § 20-77-2709 (HCBS rate setting)
    • Requires that an allowance within capitation rates “shall not be less than the amount needed” to pay providers the rates produced by a rate study to be completed by October 1, 2025.
    • The rate study’s results become the minimum rates risk‑based provider organizations may pay for HCBS (authority cited under 42 C.F.R. § 438.6 as of Jan 1, 2025).
    • Scope of the rate study:
      • Must cover services in the Community and Employment Support 1915(c) waiver and services under the 1915(i) state plan amendment used under this subchapter.
      • Must accurately capture provider costs and relevant factors to promote economy, efficiency, quality of care, and equal access consistent with 42 U.S.C. § 1396a and 42 C.F.R. Part 447 (as of Jan 1, 2025).
    • Department of Human Services (DHS) responsibilities:
      • DHS will develop cost factors and other criteria for the study with input from HCBS providers.
      • Because no rate study has been done since risk‑based organizations began serving the state, if the study outcome shows an increase greater than 10%, DHS may phase in increases across two years as authorized by state appropriations and budgets.
      • DHS must conduct a full provider rate review according to the published rate review schedule to keep rates aligned with costs.

Who is affected
- Primary: Risk‑based provider organizations (provider‑led Medicaid care organizations), and the direct service HCBS providers who contract with them (e.g., providers participating in 1915(c) waiver and 1915(i) services).
- Secondary: Medicaid beneficiaries who receive HCBS (access and quality implications); Department of Human Services (implementation, rate study, and budget planning); state budget/appropriations (potential increased capitation and phased increases).
- Federal: The provisions reference and must comply with applicable federal Medicaid regulations (CMS).

Fiscal/implementation considerations
- The bill effectively requires higher capitation allowances if the rate study identifies provider costs above current allowances — potentially increasing Medicaid capitation payments and state budgetary obligations.
- DHS may phase in increases over two years if increases exceed 10%, but phase‑in is contingent on state appropriations.
- Key deadline: completion of the rate study by October 1, 2025.

Procedural/timeline notes and action items
- The text itself requires the rate study by Oct 1, 2025, and sets the study’s results as binding minimums for payments by risk‑based organizations.
- Because the supplied legislative history is inconsistent and includes records from different jurisdictions, confirm:
- The bill’s official title and current status (filed, passed, enrolled, vetoed, enacted, or died) in the Arkansas legislative records.
- Whether companion SB 1487 advanced or was enacted (it is listed as a companion).

If you want, I can:
- Check the official Arkansas legislative website (or provide a step‑by‑step) to verify the bill’s final status and any enacted language.
- Produce a short explainer for providers or DHS on implementation impacts and next steps.

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

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