PREPARED BY: Mikayla Findlay
LB 380 DATE PREPARED: April 14, 2025
PHONE: 402-471-0062
Revision: 01
Revised to include provisions of AM 728 & AM 814 FISCAL NOTE
LEGISLATIVE FISCAL ANALYST ESTIMATE
ESTIMATE OF FISCAL IMPACT – STATE AGENCIES (See narrative for political subdivision estimates)
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
CASH FUNDS $2,268,003 $2,268,003 $4,536,006 $4,536,006
FEDERAL FUNDS $4,212,005 $8,424,011
OTHER FUNDS
TOTAL FUNDS $6,480,008 $12,960,017
Any Fiscal Notes received from state agencies and political subdivisions are attached following the Legislative Fiscal Analyst Estimate.
This bill combines amended versions of provisions originally introduced this year in LB 380, LB381, and LB610.
Provisions originally introduced in LB 380
The bill adds requirements for the Division of Medicaid and Long-Term Care with the Department of Health and Human Services
(DHHS) and places restrictions on contractors in the medical assistance program, specifically Managed Care Organiz ations (MCOs),
through which a majority of Medicaid services are channeled.
Pertaining to new requirements of MCOs, the bill:
• prohibits MCOs from limiting mental health and substance use disorder coverage more than other conditions
• requires MCOs to maintain adequate provider networks for mental health and substance use d isorder services
• requires MCOs to utilize generally recognized standards of care criteria and make utilization review policies p ublic
• and prohibits MCOs from modifying including revoking authorization for mental health and substance use disorder services
after the provider renders such service.
AM 728 strikes the provision prohibiting MCOs from reducing rates lower than what is published by DHHS which would have had a
fiscal impact though the scope of the impact was indeterminable. DHHS notes additional staff time would be required to update
regulations, the costs of which can be absorbed.
Provisions originally introduced in LB 610
This bill would require the Department of Health and Human Services (DHHS ) to seek federal app roval for a supplementa l
reimbursement for the actual and federally allowable costs within the Ground Emergency Medical Transport (GEMT) Act on or before
January 1, 2026. The bill allows Medicaid to seek approval to increase managed care organizations (MCOs) capitation to pay increased
rates effective January 1, 2025 h owever DHHS notes direct payments may not be retroactive therefore that portion is not efficacious.
DHHS indicates that to implement the bill changes would be necessary to MCO contracts and intergovernmental transfer (IGT)
agreements. These administrative changes may necessitate an additional staff person. Should an additional F TE be needed, the GEMT
Act permits DHHS to cover the administrative costs with a portion of the IGT collected for the enhanced payment.
The agency estimates are based off of other state’ s data from similar programs. The impact for a full ye ar is estimated to be
$12,960,017 of which $4, 536,006 would be collected via IGT agreements. A fraction of the cash revenue would be dedicated to
administrative expenses which DHHS indicates would be no more than $150,000 annually. DHHS uses a blended federal match rate of
65% for the purposes of this estimate. There is no basis to disagree with the agency estimate.
Provisions originally introduced in LB 381
This bill modifies provisions of Medicaid program integrity audits. AM 728 addresses concerns of DHHS including establishing
definitions, procedures, and harmo nizing the new requirements with federal regulation s. The changes ensure that DHHS can maintain
participation with Unified Program Integrity Contractors (UPICs). DHHS indicates indeterminable fiscal impact related to decreased
audit recoveries overall.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 380 AM: 728,814 AGENCY/POLT. SUB: Nebraska Department of Health & Human Services
REVIEWED BY: Ann Linneman DATE: 4-14 -2025 PHONE: (402) 471-4180
COMMENTS: Concur with the Nebraska Department of Health and Human Services’ assessment of fiscal impact.
LB (1) 380 AM728 AM814 FISCAL NOTE 2025
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
State Agency or Political Subdivision Name:(2) Department of Health and Human Services
Prepared by: (3) John Meals Date Prepared 4-14-25 Phone: (5) 471-6719
FY 2025-2026 FY 2026-2027
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
CASH FUNDS $2,268,003 $2,268,003 $4,536,006 $4,536,006
FEDERAL FUNDS
$4,212,005 $8,424,011
OTHER FUNDS
TOTAL FUNDS
$6,480,008 $2,268,003 $12,960,017 $4,536,006
Return by date specified or 72 hours prior to public hearing, whichever is earlier.
Explanation of Estimate:
The Department of Health and Human Services (DHHS) estimates increased staff time that would need to be
allocated to complying with sections of this bill. LB380/AM728 /AM814 could require updates to regulations,
MCO contracts and capitation rates, creating and publishing additional reports and information, and
establishing a monthly communication system with all healthcare providers participating with Medicaid. The
additional time and costs associated with these requirements will be absorbed by the Department.
LB380/AM728/AM814 adds requirements to Medicaid program integrity and program integrity audit s and
establishes limitations on Medicaid program integrity contractors’ capability to perform industry standard audits
required of state Medicaid programs as established in federal regulations (42 CFR Chapter IV, Subchapter C,
Part 455). LB380/AM728/AM814, which incorporates amended language from LB381, does mitigate the most
significant concerns noted by DHHS in the original fiscal note for LB381, but would still add additional
requirements and limitations for the department. LB380/AM728 /AM814 changes the look back period from four
years to three years, which will likely decrease the overall recoveries. While there could be fiscal impact as a
result of this portion of LB380/AM728/AM814 , it is undeterminable and is not expected to be significant .
LB380/AM728/AM814, which also incorporates amended language from LB610, amends existing Neb. Rev.
Stat. §§ 68- 977 to 68- 988, the Ground Emergency Medical Transport (GEMT) Act, to require the Department
of Health and Human Services (DHHS) to gain federal approval to implement a new supplemental payment
program for governmental ambulance service providers in Nebraska that participate with Medicaid. Provider
participation in the program is voluntary, but it does require that participating providers submit an
intergovernmental transfer (IGT) of funds to the Department for the nonfederal share of the supplemental
payment.
This bill allows Medicaid to seek approval to increase managed care organization (MCOs) capitation (via a
directed payment) to pay the supplemental payments for dates of service effective January 1, 202 6. To
implement this bill, Medicaid would need to obtain annual approval of a new directed payment program from
the Centers for Medicare & Medicaid Services (CMS). The Department would also need to amend existing
MCO and actuarial contracts or procure new contracts and the IGT agreements with all governmental
providers participating in the program. There may be a need to absorb significant work or consider adding a
full-time employee (FTE) to effectuate the GEMT Act, but statutory language allows the department to cover
the costs through using a portion of the IGT collected for the enhanced payment.
DHHS estimates that this new program will result in significant enhanced payments to eligible participating
providers, as it allows the department to pay participating governmental providers up to their cost. Given that
DHHS does not currently have cost data for Nebraska GEMT providers, the department estimated the fiscal
impact based on a review of other states, including Iowa, who have similar programs currently in place. The
state estimates that the total directed payment for all providers could be around $13 million dollars per year.
The department would then expect to collect approximately $4.5 million per year in funding through IGTs from
participating providers. A small portion of the IGT collected would be used to fund the department operation of
the program which the department estimates to be no more than $150,000 per year, with the majority
remaining amount to be used as the source of the non- federal share to make supplemental (or directed) GEMT
payments along with the federal match. DHHS estimates it would need $2,268,003 in new cash spending
authority in SFY 26 and $4,536,006 in SFY 27 to pay out the additional funds proposed in this bill through a
directed payment, as well as approximately $4,212,005 in SFY 26 and $8,424,011 in SFY 27 of additional
Federal Fund appropriations in Medicaid for the FFP associated with the non- federal share (cash). There
would not be any impact on general fund (GF) expenditures, as the IGT from governmental providers is
intended to cover the non- federal share of the increased payments.
The department would recommend the establishment of a new cash fund to be utilized for the purposes of the
GEMT program.
A blended federal rate of 65% was used based on the mix of eligibility groups that would utilize the services
(Expansion, CHIP, Regular Medicaid).
MAJOR OBJECTS OF EXPENDITURE
PERSONAL SERVICES:
NUMBER OF POSITIONS 2025-2026 2026-2027
POSITION TITLE 26-26 26-27 EXPENDITURES EXPENDITURES
Benefits...............................................................................................................................
Operating............................................................................................................................
Travel..................................................................................................................................
Capital Outlay.....................................................................................................................
Aid......................................................................................................................................
$6,480,008 $12,960,017
Capital Improvements.........................................................................................................
TOTAL............................................................................................................
$6,480,008 $12,960,017