Bill
HB 229
HB 229 requires Medicaid to pay licensed ambulatory surgical centers at least 95% of Medicare ASC rates, funded by state dollars and federal matching funds, effective July 1, 2025.
Status & procedural notes
- Bill number: HB 229 (Medicaid Rates/Ambulatory Surgical Centers).
- Introduced: 2025 (first read Feb. 27, 2025; user-provided status: Passed 1st Reading).
- Effective date specified in the text: July 1, 2025.
- Requires the Department of Health and Human Services (DHHS), Division of Health Benefits, to file a Medicaid State Plan amendment with CMS to implement the reimbursement changes; the initial rate changes take effect on the effective date approved by CMS for that amendment.
Purpose / intent
- Increase and standardize Medicaid reimbursement for services provided by licensed ambulatory surgical centers (ASCs) so those services are reimbursed at a level that closely tracks Medicare rates. The policy aims to support ASC financial viability and access to outpatient surgical care for Medicaid enrollees.
Key provisions
- Medicaid reimbursement floor for ASCs: DHHS must amend the Medicaid State Plan so that all services furnished by licensed ambulatory surgical centers are reimbursed at a rate of at least 95% of the Medicare Ambulatory Surgical Centers (ASC) fee schedule.
- The applicable Medicare ASC fee schedule is the version “in effect as of January 1 of each year,” as published by CMS. Rates must be set/adjusted annually to reflect that benchmark.
- The initial payment adjustments become effective on the date CMS approves the State Plan amendment.
- Appropriation / funding:
- Appropriates $10,476,000 in recurring General Fund dollars for each year of the 2025–2027 biennium to DHHS, Division of Health Benefits.
- Those state funds are intended to match and draw down approximately $19,135,000 in recurring federal Medicaid funds annually (i.e., total recurring program increase supported by federal match).
- Effective date: July 1, 2025.
Who is affected
- Ambulatory Surgical Centers (ASCs): licensed ASCs that treat Medicaid beneficiaries will receive higher Medicaid payment rates (minimum 95% of Medicare ASC rates), improving revenue per service.
- Medicaid enrollees: potentially improved access to outpatient surgical services if ASCs sustain or expand service capacity.
- State budget: recurring General Fund commitment ($10.476M/year during the 2025–2027 biennium) plus the associated recurring federal match (~$19.135M/year).
- DHHS/Medicaid program administration: required to prepare and submit a State Plan amendment and implement the new reimbursement methodology.
Potential impacts/considerations
- Access & provider participation: higher ASC payments may help maintain or expand provider participation in Medicaid and preserve local outpatient surgical capacity.
- Budgetary implications: the bill authorizes a specific recurring state appropriation and leverages substantial federal matching funds; ongoing costs beyond the biennium may require future appropriations depending on continued federal match and State budget decisions.
- Rate linkage to Medicare: indexing to the annual Medicare ASC fee schedule (Jan 1 each year) anchors Medicaid reimbursements to a widely used federal benchmark, providing predictability but also exposure to Medicare rate changes.
- Implementation timing: benefits to providers begin only after DHHS receives CMS approval of the State Plan amendment; CMS review timeline can affect the practical start date for higher payments.
Bottom line
HB 229 directs DHHS to align Medicaid ASC payment rates to at least 95% of the annual Medicare ASC fee schedule, funds that increase with a recurring state appropriation matched by federal Medicaid funds, and becomes effective July 1, 2025 (subject to CMS approval of the required State Plan amendment). The measure is designed to boost ASC reimbursement, with likely implications for provider finances, Medicaid access, and the State budget.
Compiled from official sources — confirm details with the bill’s official record.
Sign in to ask a question.
