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 Herndon
LAST UPDATED
ORIGINAL DATE 1/24/2025
SHORT TITLE Medicaid for Personal Care Services
BILL
NUMBER House Bill 55
ANALYST Hernandez
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected $20,800.00 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
HCA/MAD
No fiscal
impact
$194.6 $194.6 $389.2 Recurring General Fund
Total
No fiscal
impact
$194.6 $194.6 $389.2 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 Choose an item.
House Bill 55 (HB55) appropriates $20,800,000 from the general fund to the Health Care
Authority (HCA) for the purpose of raising the Medicaid reimbursement rate for personal care
service provider agencies to $23.50 per hour. HB55 requires that 70 percent of the $23.50 go
toward compensation of direct care workers providing personal care services.
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.
House Bill 55 – Page 2
FISCAL IMPLICATIONS
The appropriation of $20,800,000 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.
HCA notes that, due to the oversight requirements of ensuring that 70 percent of reimbursement
payments goes to direct care workers, HCA would need to hire two additional FTE at a cost of
$194.8 thousand. These FTE would be responsible for examining service provider agencies’
overhead, travel, training and personal protective equipment costs along with their direct care
workers’ hourly wage to determine if 70 percent of the reimbursement payment is going to direct
care workers.
SIGNIFICANT ISSUES
HCA notes that the $20.8 million appropriation is not sufficient to meet the requirements
outlined in HB55. To pay each Medicaid personal care service provider agency $23.50 per hour
of services, the necessary amount appropriated would need to be $51.4 million.
HCA emphasizes that, in order to access federal match for the increased reimbursement rate
outlined HB55, the Medical Assistance Division will need to submit a waiver amendment to the
federal Centers for Medicare and Medicaid Services (CMS). HCA states that this process
typically takes four to six months and that, until CMS approves the waiver, HCA cannot increase
the reimbursement rate. This would create a conflict with HB55’s effective date; although the
bill would become effective on June 20
th
, 2025, HCA would be unable to raise the
reimbursement rate for personal care service to $23.50 until CMS approves the increase, likely
four to six months after application.
ADMINISTRATIVE IMPLICATIONS
HCA clarifies:
In spring of 2024, CMS issued the Ensuring Access to Medicaid Services final rule, also
known as the access rule. The access rule requires a payment adequacy minimum
performance standard that states must ensure 80 percent of Medicaid payments go to
compensation for direct care workers by July 9, 2030. CMS has yet to publish guidance
on the payment adequacy minimum performance standard and how states should
implement, monitor and enforce it. In the absence of federal guidance, CMS has
encouraged states to wait for further direction on access rule requirements before
implementing.
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