The Senate wants more than $194.9 million in Medicaid reimbursement rate increases in next year’s budget, based on a Fiscal Year (FY) 2025 spending bill that moved out of subcommittee late last month.

The plan also boosts Michigan’s health and human services spending by more than $1.97 billion.

“Uplifting the Medicaid reimbursement payments was a top priority in this budget cycle,” said Sen. Sylvia Santana (D-Detroit), chair of the Senate Department of Health and Human Services Appropriations Subcommittee. “We looked at the top five billing codes in the state, and allocated values accordingly. That was a priority for me.”

Under the $37.7 billion DHHS budget in SB 767, $54.66 million ($14.5 million from the General Fund) went to raise rates for outpatient facilities that accept Medicaid and Medicare patients. In 2021, according to a July 2023 study by Health Management Associates (HMA), the average total cost per visit to these facilities was $267.74 while payment rates were $171.55.

Other reimbursement rate increases will go toward autism applied behavioral analysts, boosting available reimbursements to up to $70 per hour.

Also receiving higher Medicaid reimbursement rates are office visits, some dental care, certain anesthesia services, private duty nursing and speech therapy services.

For new patient visits, including 30-minute visits where there’s a low need for care and 45-minute visits where there’s a moderate need for care, Michigan would go from paying up to 57 percent of what federal Medicare would cover to reimbursing 61 percent under the bill.

Furthermore, under SB 767, Medicaid would go from reimbursing up to 83 percent of what Medicare would pay for a urine pregnancy test to matching the Medicare rate completely.

According to Santana’s office, the state is experiencing an inability to retain staff and care providers, especially at facilities that take Medicaid patients, due to financial losses.

“They’re competing with private payers . . . it’s really important to make sure that there’s some increase in Medicaid payments so providers will accept those individuals,” Santana said. “We don’t want people to not get services or be discriminated against because they have Medicaid as their health care.”

Moreover, SB 767 takes a new approach to how the state deploys federal dollars from the Temporary Assistance for Needy Families (TANF), which goes toward severely low-income families with no more than $3,000 in cash assets.

SB 767 would use $12.5 million in TANF dollars to follow the Governor’s own FY ’25 budget suggestions, specifically expanding the time cap for when households can receive direct payment assistance through the state’s Family Independence Program (FIP) from 48 months to 60 months.

Additionally, while the governor wants to increase child TANF payments from $50 to $150 monthly for youths under the age of 6, the Senate subcommittee wants the payment to be $2,500 per child annually (or around $208.33 per month).

For children from the ages of 6 to 13, the Senate subcommittee proposes its own FIP payment of $1,100 per child annually (or around $91.66). Santana pointed out that Michigan only spends 6 percent of its TANF money on supporting families. That’s not adequate, she said.

The per-child payments will be extra aid alongside the $12.75 million appropriation for updating FIP TANF time limits and payment standards. Altogether, the Senate budget calls for $80 million worth in TANF funding swaps and spending increases that are more focused on direct cash assistance.

According to a presentation by the Citizens Research Council (CRC) of Michigan, Michigan was among the five states who spent the lowest amount of their TANF dollars on basic assistance in FY ’22, including cash, spending vouchers and the delivery of other benefits connected to shelter, food, clothing and personal care items.

During FY ’22, Michigan spent 5.7 percent of its TANF bucks on basic assistance, while states like Minnesota, West Virginia and New Mexico spent more than 40 percent of its TANF appropriations on such aid.

Other pieces of the Senate’s proposed DHHS budget for FY ’25 feature:

– $24.75 million to help prevent water shutoffs in poor communities. Santana said the stakeholders wanted $60 million, and the budget item hopes to maintain their operations until legislation to establish a state-run “Low-Income Water Residential Affordability Program Fund” progresses (See “Water Affordability Bills Won’t End Similar Local Programs, But Will Make Them Bigger,” 1/29/2024).

– $14 million for residential treatment facility providers to house youths in legal trouble.

“We have kids who are out of state. My overall goal was not to pick winners and losers, but to provide a bucket of funding that would help to support those individuals either starting those facilities or even building capacity,” Santana said.

– $8 million to expand a program that purchases bundles of overdue medical bills at reduced prices, so individuals can have their debt forgiven.

– A prohibition on medical facilities from sharing information on reproductive health if they receive a subpoena from another state entity seeking to investigate someone who traveled to Michigan for an abortion.

This story courtesy of MIRS, a Lansing-based news and information service.