(The Center Square) — The Louisiana Department of Health will not implement recommended Medicaid rate increases for home- and community-based services, saying a recent rate study is only the first step in a longer review process.
In a statement, the department said the home and community-based services rate study “is the first step of a three-part strategy to ensure transparency and equitable rates” for providers.
“The next step will be the implementation of a comprehensive provider cost report in November 2026,” the department said. “Once LDH has the data from the 2026 cost reports, the last step will include reevaluating rate policies to align service definitions and licensing expectations with rate methodology.”
The modeled rates were outlined in a January report by consulting firm Milliman, an actuarial and healthcare consulting company that advises governments and insurers on cost modeling and policy analysis. It reviewed payment rates for Medicaid-funded home and community-based services for state fiscal year 2027.
The study covered services for people with intellectual and developmental disabilities, physical disabilities and aging-related needs across eight programs, including the Adult Day Health Care Waiver, Community Choices Waiver, New Opportunities Waiver and Residential Options Waiver.
Milliman estimated that adopting the modeled rates would increase overall Home and Community-Based Services expenditures by 14.2%, or about $165 million in combined state and federal spending, based on annualized July-to-December 2024 claims data. In-home services accounted for the largest share of the projected increase.
The report said Louisiana Department of Health had indicated it would use the results to evaluate overall home and community-based services funding levels and inform possible changes to current payment rates.
However, Milliman noted final decisions on rate design, methodology and assumptions remain with the department. Any rate changes would likely have to be incorporated into waiver amendments or state plan amendments for federal review.
The delay comes after providers and stakeholders told Milliman that current funding levels have made it difficult to hire and retain workers, cover transportation costs and serve people with complex medical or behavioral health needs.
According to the report, stakeholders raised concerns that other industries offer higher wages and benefits for jobs with similar credential requirements, limiting the available workforce for direct-care positions.
Providers also told consultants that vehicle and insurance costs have increased and are difficult to cover under current rates. Some stakeholders said beneficiaries do not have sufficient access to transportation, including vehicles equipped for people with mobility needs.
