HB279 Alabama 2023 Session

Summary

Primary Sponsor

Kyle South

Republican

Session

Regular Session 2023

Title

Relating to Medicaid; to amend Section 40-26B-26, Code of Alabama 1975, to revise the circumstances under which the Alabama Medicaid Agency may revise the ceiling for the Medicaid reimbursement rate to nursing facilities during a given fiscal year; and to make nonsubstantive, technical revisions to update the existing code language to current style.

Summary

HB279 would let the Alabama Medicaid Agency revise nursing facility rate ceilings mid-year for unforeseen cost increases and adds related reforms.

What This Bill Does

It authorizes adjusting the Medicaid reimbursement rate ceiling for nursing facilities during a fiscal year when facilities cannot be reimbursed for increases in allowable costs due to unforeseen circumstances. It keeps the general rate-setting framework but adds specific rules for how ceilings are calculated, limits how much ceilings can rise, and how certain costs are treated. It creates a special reimbursement model for ventilator-enabled units and a quality incentive program funded at least at $5 million, plus some technical language updates. It becomes effective on the first day of the third month after passage.

Who It Affects

• Nursing facilities participating in Alabama Medicaid: potential mid-year adjustments to their reimbursement ceilings and new cost and equipment provisions that could change how much they are paid.
• Alabama Medicaid Agency and state budget/taxpayers: gain authority to revise ceilings, implement enhancements and quality incentives, which could affect Medicaid expenditures.

Key Provisions

• Authorizes mid-year revisions to the nursing facility rate ceiling when facilities cannot be reimbursed for increases in allowable costs due to unforeseen circumstances (emergencies, new laws/regulations, or catastrophic events).
• Keeps the existing reimbursement methodology but details ceiling calculations: operating cost center ceiling as median plus 5%; direct patient care ceiling as median plus 10% with a cost-based cap using actual cost per patient day or ceiling plus 11%, whichever is lower; inflation index calculated without trend factor variance.
• Increases to ceilings per year cannot exceed the product of the previous year's ceiling and the sum of the Medicaid Inflation Index plus four percent.
• Adds to the daily rate for certain specialized equipment costs based on the prior year's actual equipment cost divided by Medicaid patient days.
• Allows enhancements to Medicaid payments for rural hospital–connected facilities under governmental authority, not limited by standard code ceilings.
• Creates a special reimbursement model for dedicated ventilator units that meet specific facility requirements (power, gases, 24/7 staffing, physician direction).
• Establishes a quality incentive program with at least $5,000,000 per scoring year, using CMS quality measures and independently gathered customer satisfaction data to determine awards; payments are lump-sum by Feb 1 after each scoring period.
• Effective date: the act becomes law on the first day of the third month after passage.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Medicaid, circumstances for revising reimbursement rates to nursing facilities revised