Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Cates
LAST UPDATED
ORIGINAL DATE 1/22/2025
SHORT TITLE
Medicaid Waiver Reimbursement Rate
Increases
BILL
NUMBER House Bill 42
ANALYST Hernandez
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected 6,300.0 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From
Health Care Authority (HCA)
SUMMARY
Synopsis of House Bill 42
House Bill 42 (HB42) appropriates $6.3 million from the general fund to the Health Care
Authority for the purpose of providing rate increases to service providers that receive
reimbursement from certain Medicaid waiver programs.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
The appropriation of $6.3 million contained in this bill is a recurring expense to the general fund.
Any unexpended or unencumbered balance remaining at the end of FY26 shall revert to the
general fund. Changing the reimbursement rate for providers for one year creates an expectation
that the reimbursement will continue in future years, which makes this a recurring expense.
SIGNIFICANT ISSUES
According to analysis by both Legislative Finance Committee and Health Care Authority staff,
the bill does not specify which rates would be increased, as well as which service providers House Bill 42 – Page 2
would be eligible for the rate increases. This would leave the Health Care Authority with
significant leeway in determining which Medicaid waiver programs would receive a rate
increase.
ADMINISTRATIVE IMPLICATIONS
The Health Care Authority notes that rate increases included in HB42 would require the Health
Care Authority to submit a Medicaid waiver to the federal Centers for Medicare and Medicaid
Services. The waiver process takes approximately four to six months, and no rate increases could
take place until the waiver is accepted.
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