Bill Sponsors
Solomon, and Casey
Committee
House Finance
Summary
Select
This bill dictates that any money the state saves from having fewer people enrolled in Medicaid must be kept within the healthcare system. Instead of using these savings for other state budget needs or deficit reduction, the funds will be used to increase the reimbursement rates paid to healthcare providers, such as hospitals, doctors, and community health centers. The state health office is required to adjust these payment rates, ensure most of the money goes directly to providers rather than insurance companies, and submit an annual report detailing the savings and rate adjustments.
Sponsor
Analysis
Pros for Progressives
- Directs critical funding to community health centers and hospitals that serve vulnerable, low-income populations, ensuring these essential facilities remain financially stable.
- Prevents the state from diverting healthcare savings into unrelated budget areas, protecting the overall pool of resources dedicated to the public healthcare safety net.
- Mandates strict oversight and a 90% pass-through rate for managed care organizations, ensuring corporate insurers do not hoard the savings and that the money reaches frontline providers.
Cons for Progressives
- Fails to establish a state-level safety net for the thousands of Rhode Islanders expected to lose Medicaid coverage, seemingly accepting the coverage loss as a given.
- Focuses strictly on paying healthcare businesses and providers for uncompensated care rather than protecting the uninsured individuals from receiving financially devastating medical bills.
- Mandates that savings go only toward increasing provider rates, missing an opportunity to use those funds to expand Medicaid eligibility or add covered services like dental and vision care.
Pros for Conservatives
- Offsets the financial burden on private healthcare businesses by ensuring they receive higher reimbursements for the uncompensated care they are often legally required to provide.
- Reflects a reduction in overall Medicaid enrollment, aligning with conservative goals to decrease dependency on government-funded welfare programs.
- Introduces stringent reporting and compliance requirements for the state health office, increasing transparency and accountability regarding how taxpayer funds are distributed.
Cons for Conservatives
- Prohibits the state from using Medicaid savings for deficit reduction or taxpayer relief, mandating that the government spend the funds instead of saving them.
- Imposes strict government price controls on private managed care contracts by mandating a 90% pass-through rate, limiting corporate freedom and operational flexibility for insurers.
- Artificially inflates Medicaid reimbursement rates based on temporary enrollment savings, which could create unsustainable ongoing funding expectations for providers once those savings stabilize.
Constitutional Concerns
None Likely. The bill simply directs state budget appropriations and Medicaid reimbursement rates, which falls squarely within the legislature's authority to manage state funds and programs. It does not implicate free speech, due process, or search and seizure rights.
Impact Overview
Groups Affected
- Healthcare providers
- Hospitals
- Community health centers
- Medicaid patients
- Managed care organizations
Towns Affected
All
Cost to Taxpayers
None
Revenue Generated
None
BillBuddy Impact Ratings
Importance
Measures population affected and overall level of impact.
Freedom Impact
Level of individual freedom impacted by the bill.
Public Services
How much the bill is likely to impact one or more public services.
Regulatory
Estimated regulatory burden imposed on the subject(s) of the bill.
Clarity of Bill Language
How clear the language of the bill is. Higher ambiguity equals a lower score.
Enforcement Provisions
Measures enforcement provisions and penalties for non-compliance (if applicable).
Environmental Impact
Impact the bill will have on the environment, positive or negative.
Privacy Impact
Impact the bill is likely to have on the privacy of individuals.
Bill Status
Current Status
Held
Comm Passed
Floor Passed
Law
History
• 05/15/2026 Introduced, referred to House Finance
Bill Text
1. Legislative findings.
The general assembly finds and declares that:
(1) The General Assembly recognizes the importance of maintaining access to healthcare services for Rhode Islanders and supporting a stable, functioning healthcare delivery system;
(2) Recent and anticipated federal policy changes are expected to reduce Medicaid enrollment, resulting in a loss of coverage for thousands of Rhode Islanders;
(3) The loss of insurance coverage does not eliminate the need for healthcare services, but shifts the cost of delivery of care to providers serving all patients regardless of ability to pay;
(4) Hospitals, community health centers, and other providers will continue to deliver necessary care, resulting in increased uncompensated care and financial pressure on the healthcare system;
(5) Reductions in Medicaid enrollment are expected to generate savings within the Medicaid program;
(6) Aligning those savings with the continued demand for care supports provider stability and access to services across the state; and
(7) Accordingly, any Medicaid program savings associated with enrollment reductions shall be retained within the healthcare system and reinvested in providers through targeted increases in reimbursement.
SECTION 2. Title 42 of the General Laws entitled "STATE AFFAIRS AND GOVERNMENT" is hereby amended by adding thereto the following chapter: CHAPTER 169 MEDICAID PROGRAM FUNDING AND REALLOCATION OF ENROLLMENT SAVINGS
42-169-1. Definitions.
As used in this chapter, “enrollment-driven savings” means the reduction in Medicaid expenditures in the fiscal year ending June 30, 2028, attributable to decreases in enrollment, as reflected in the estimates adopted at the May meeting of the Rhode Island caseload estimating conference.
42-169-2. Reallocation of savings.
Notwithstanding any general or special law to the contrary:
(1) All enrollment-driven savings shall be retained within the Medicaid program and shall not be used for deficit reduction or other purposes;
(2) Such savings shall be reallocated exclusively to increase Medicaid provider reimbursement rates, including:
(i) Hospital inpatient services;
(ii) Hospital outpatient services;
(iii) Physician services; and
(iv) Federally qualified health center services; and
(3) Funds provided pursuant to this section shall be additive to existing Medicaid reimbursement levels and shall not be used to supplant, replace, or offset existing appropriations, rate structures, or payment methodologies in effect as of June 30, 2026.
42-169-3. Implementation.
The executive office of health and human services shall:
(1) Adjust Medicaid fee-for-service reimbursement rates as necessary;
(2) Amend managed care contracts and/or implement state directed payments to ensure that rate increases are reflected in payments to providers, with a minimum provider pass-through rate of not less than ninety percent (90%) of each rate increase, implemented within one hundred eighty (180) days of the effective date of each rate adjustment; and
(3) Submit any required state plan amendments, waivers, or federal approvals to the Centers for Medicare & Medicaid Services.
42-169-4. Reporting and compliance.
The executive office of health and human services shall submit an annual report to the general assembly no later than October 31 of each year, covering the following: LC006445 - Page 2 of 4
(1) The calculation of enrollment-driven savings, including the methodology and actuarial assumptions used;
(2) Provider rate adjustments implemented pursuant to this chapter, itemized by provider type and care setting;
(3) The total amount of federal financial participation generated by rate investments made under this chapter;
(4) The status of any required state plan amendments, waivers, or federal approvals, including any approvals pending or denied by the Centers for Medicare & Medicaid Services; and
(5) Compliance by managed care organizations with the provider pass-through payment requirements established under § 42-169-3(2).
SECTION 3. This act shall take effect on July 1, 2026.
The general assembly finds and declares that:
(1) The General Assembly recognizes the importance of maintaining access to healthcare services for Rhode Islanders and supporting a stable, functioning healthcare delivery system;
(2) Recent and anticipated federal policy changes are expected to reduce Medicaid enrollment, resulting in a loss of coverage for thousands of Rhode Islanders;
(3) The loss of insurance coverage does not eliminate the need for healthcare services, but shifts the cost of delivery of care to providers serving all patients regardless of ability to pay;
(4) Hospitals, community health centers, and other providers will continue to deliver necessary care, resulting in increased uncompensated care and financial pressure on the healthcare system;
(5) Reductions in Medicaid enrollment are expected to generate savings within the Medicaid program;
(6) Aligning those savings with the continued demand for care supports provider stability and access to services across the state; and
(7) Accordingly, any Medicaid program savings associated with enrollment reductions shall be retained within the healthcare system and reinvested in providers through targeted increases in reimbursement.
SECTION 2. Title 42 of the General Laws entitled "STATE AFFAIRS AND GOVERNMENT" is hereby amended by adding thereto the following chapter: CHAPTER 169 MEDICAID PROGRAM FUNDING AND REALLOCATION OF ENROLLMENT SAVINGS
42-169-1. Definitions.
As used in this chapter, “enrollment-driven savings” means the reduction in Medicaid expenditures in the fiscal year ending June 30, 2028, attributable to decreases in enrollment, as reflected in the estimates adopted at the May meeting of the Rhode Island caseload estimating conference.
42-169-2. Reallocation of savings.
Notwithstanding any general or special law to the contrary:
(1) All enrollment-driven savings shall be retained within the Medicaid program and shall not be used for deficit reduction or other purposes;
(2) Such savings shall be reallocated exclusively to increase Medicaid provider reimbursement rates, including:
(i) Hospital inpatient services;
(ii) Hospital outpatient services;
(iii) Physician services; and
(iv) Federally qualified health center services; and
(3) Funds provided pursuant to this section shall be additive to existing Medicaid reimbursement levels and shall not be used to supplant, replace, or offset existing appropriations, rate structures, or payment methodologies in effect as of June 30, 2026.
42-169-3. Implementation.
The executive office of health and human services shall:
(1) Adjust Medicaid fee-for-service reimbursement rates as necessary;
(2) Amend managed care contracts and/or implement state directed payments to ensure that rate increases are reflected in payments to providers, with a minimum provider pass-through rate of not less than ninety percent (90%) of each rate increase, implemented within one hundred eighty (180) days of the effective date of each rate adjustment; and
(3) Submit any required state plan amendments, waivers, or federal approvals to the Centers for Medicare & Medicaid Services.
42-169-4. Reporting and compliance.
The executive office of health and human services shall submit an annual report to the general assembly no later than October 31 of each year, covering the following: LC006445 - Page 2 of 4
(1) The calculation of enrollment-driven savings, including the methodology and actuarial assumptions used;
(2) Provider rate adjustments implemented pursuant to this chapter, itemized by provider type and care setting;
(3) The total amount of federal financial participation generated by rate investments made under this chapter;
(4) The status of any required state plan amendments, waivers, or federal approvals, including any approvals pending or denied by the Centers for Medicare & Medicaid Services; and
(5) Compliance by managed care organizations with the provider pass-through payment requirements established under § 42-169-3(2).
SECTION 3. This act shall take effect on July 1, 2026.