NE Lawmakers give First-Round Yes to Bill to Increase Medicaid Reimbursement Rates without General Fund Dollars

Lincoln, Ne - Lawmakers gave first-round approval Feb. 11 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, would 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 would be 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 would 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.

Revenue generated by the tax would be remitted to a newly created Medicaid Access and Quality Fund. DHHS would 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 would 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 would be used within the state's Medicaid and CHIP programs.

Jacobson said the bill, when combined with federal matching funds, would generate approximately $115 million to enhance rates for providers. Those enhanced rates would help increase access to health care services, he said, noting that more than half of Nebraska counties currently are defined as maternity care deserts.

"This bill is incredibly important to the future of health care in our state, especially in rural areas and especially for pregnant women and Nebraska children," Jacobson said.

Following adoption of a technical amendment from the Banking, Commerce and Insurance Committee, senators voted 39-0 to advance LB527 from general file.