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 Woods
LAST UPDATED
ORIGINAL DATE 1/31/2025
SHORT TITLE Nursing Home Medicaid Reimbursement
BILL
NUMBER Senate Bill 97
ANALYST Chenier
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected
$19,700.0 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 No fiscal impact $19,700.0 $19,700.0 $39,400.0 Recurring General Fund
HCA $49,838.0 $49,838.0 $99,676. 0 Recurring Federal Funds
Total No fiscal impact $ 69,538.0 $ 69,538.0 $139,076 Recurring
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 Senate Bill 97
Senate Bill 97 appropriates $19.7 million from the general fund to the Health Care Authority
(HCA) to increase the Medicaid reimbursement rate for nursing homes.
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 $19.7 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. Senate Bill 97 – Page 2
HCA said that nursing homes are allowable Medicaid services and payments to nursing homes
are federally matchable at 71.67 percent in FY26. The general fund appropriation amount of
$19.7 million will be matched with $49.8 million of federal funds for a total computable of $69.5
million. This bill provides a nonrecurring appropriation for FY26, but recurring general fund
support will be needed to maintain the Medicaid reimbursement rate increase for subsequent
years. The cost of future rebasing will increase in subsequent years and will increase the general
fund cost in future years. To maintain the rate from the FY26 rebasing, the general fund must be
appropriated every year and beyond or the reimbursement rates will be reduced.
SIGNIFICANT ISSUES
HCA provided the following:
Per NMAC 8.312.3.312A “Cost Related Reimbursement of Nursing Facilities” and the
New Mexico State Plan Section 4.0 General Program Administration Attachment 4.19D,
Part 1, A, “rebasing of the prospective per diem rate will take place every three (3)
years.” Nursing Facilities (NF) have not been rebased since 2007. Although the NFs have
not had a rebase, during the 2019 regular legislative session, the Legislature passed
Senate Bill 246, the Health Care Quality Surcharge (HCQS) Act, that generated
assessment revenues to allow the HCA to increase NF per diem rates and adjust those
rates by market basket index annually starting on July 1, 2019. Then, during the 2023
regular session, the Legislature appropriated recurring general fund to HCA to increase
reimbursement rates again. From that appropriation, nursing homes received a $9.85 rate
increase for low-level services and a $14.19 for high-level services costing $13,100
thousand in FY24.
For FY26, the projected cost (provided by the nursing home auditor under contract with
HCA) to rebase the nursing home is $88,574 thousand with $25,093 thousand of general
fund dollars. Of the state funds needed to support the rate increases, $5,459 thousand
come from the assessment revenues imposed by the HCQS and the remaining $19,634
thousand comes from the general fund. Based on the projected cost along with the
revenues from HCQS, the appropriation in this bill of $19,700 thousand from the general
fund is sufficient to cover the cost of rebasing nursing homes for FY26, including the
administrative contractor costs.
EC/hj/SR/sgs