Medicaid Provider Amendments, the official text

Medicaid Provider Amendments
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Keven J. Stratton
House Sponsor: Steve Eliason

LONG TITLE
General Description:
This bill addresses provisions related to Medicaid providers.
Highlighted Provisions:
This bill: requires the Department of Health and Human Services (department) to: establish quality measures for evaluating certain Medicaid providers' performance;
evaluate certain Medicaid providers on performance as measured by the quality measures; and
annually report to the Social Services Appropriations Subcommittee on the performance based on the quality measures of the Medicaid providers determined by the Legislature;

requires the department to implement a closed loop referral system for referrals for the delivery of health-related social needs care to Medicaid-eligible individuals;
requires the Division of Services for People with Disabilities (division) to notify a provider of amendments to the provider's contract with the division;
defines terms; and
makes technical and conforming changes.

Money Appropriated in this Bill: This bill appropriates $42,778,300 in operating and capital budgets for fiscal year 2027, including: $16,888,300 from General Fund; and $25,890,000 from various sources as detailed in this bill. Other Special Clauses: None Utah Code Sections Affected: AMENDS:
26B-6-403, as renumbered and amended by Laws of Utah 2023, Chapter 308

ENACTS:
26B-3-143, Utah Code Annotated 1953
26B-3-144, Utah Code Annotated 1953

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 26B-3-143 is enacted to read:
26B-3-143. Medicaid provider quality measures -- Reporting -- Eligibility for incentive payments.
(1) As used in this section: (a) "Incentive payment" means a one-time fee-for-services payment to a participating Medicaid provider, including a managed care entity or a Medicaid provider that is paid under a fee- for - service arrangement, based on the Medicaid provider's performance as evaluated by the department as described in this section.
(b) "Managed care entity" means a person that contracts with the Medicaid program to manage the provision of health care services in a managed care delivery system on a capitated basis.
(c) "Medicaid provider" means any person, individual, corporation, institution, or organization that: (i) is currently enrolled in the Medicaid program;
(ii) provides Medicaid-covered services under the Medicaid program;
(iii) has entered into a provider agreement with the Medicaid program; and
(iv) is reimbursed: (A) through a managed care entity; or
(B) fee-for-service.

(d) "Participating Medicaid provider" means a Medicaid provider: (i) that is in a group of Medicaid providers selected by the Legislature and that the Legislature directs the department to evaluate in a fiscal year as described in Subsection (5)(a); and
(ii) that submits verifying documentation of the Medicaid provider's completion or progress toward quality measures in accordance with rules made by the department under this section.

(e) "Quality measures" means the metrics the department establishes to evaluate a Medicaid provider's performance as described in Subsection (2).

(2) (a) The department shall make rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to establish quality measures.
(b) Quality measures may include: (i) improved health outcomes and care experience for enrollees;
(ii) care coordination, data sharing, and value-based delivery;
(iii) workforce stability and evidence-based clinical practices; and
(iv) any other metrics or performance areas the department deems appropriate.

(c) The department shall establish separate quality measures for each Medicaid provider type selected for participation in accordance with the process described in Subsections (4) and (5).

(3) (a) The department shall make rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to establish: (i) a process for a participating Medicaid provider to submit documentation verifying the participating Medicaid provider's completion or progress toward the quality measures established for the Medicaid provider's provider type;
(ii) a methodology for evaluating a participating Medicaid provider's progress toward quality measures; and
(iii) exclusions for a Medicaid provider's participation based on adverse findings or disciplinary actions by a certifying, licensing, or accrediting entity.

(b) The department shall report to the Rules Review and General Oversight Committee on rules the department makes in accordance with this Subsection (3).

(4) (a) The department shall annually, before October 31, submit a report to the Social Services Appropriations Subcommittee of the department's evaluation of: (i) Medicaid provider types to assist the Legislature in selecting and prioritizing Medicaid providers eligible for incentive payments under Subsection (6) in the following fiscal year; and
(ii) participating Medicaid providers' completion or progress toward quality measures as described in Subsection (3)(a)(ii), if any.

(b) The report described in Subsection (4)(a)(i) shall include: (i) a comparative analysis of current Medicaid reimbursement rates and rates paid by other comparable payers, including Medicare, where applicable;
(ii) the length of time since the last rate increase for the Medicaid provider type; and
(iii) an analysis of the impact of inventive payments on the Medicaid provider type.

(c) In each year in which incentive payments are distributed as described in this section, the department shall annually, before October 31, report to the Social Services Appropriations Subcommittee on the distribution of incentive payments as described in Subsection (6), including on what percentage of an appropriation under this section was distributed directly to Medicaid providers.

(5) (a) Subject to appropriations from the Legislature for this purpose, and the Legislature's determination of eligible Medicaid provider types for the following fiscal year, a participating Medicaid provider may be eligible for incentive payments based on the participating Medicaid provider's performance as evaluated by the department as described in Subsection (3)(a)(ii).
(b) The department may use up to 2% of an appropriation under this section for costs related to the administration of the provisions of this section.

(6) The department shall ensure that incentive payments are distributed: (a) proportionally to participating Medicaid providers;
(b) in accordance with l egislative appropriations; and
(c) in accordance with CMS rules and regulations.

(7) The department may apply for necessary CMS authority to implement this section.

Section 2. Section 26B-3-144 is enacted to read:
26B-3-144. Closed loop referral system.
(1) As used in this section: (a) "Authorized user" means a social needs care provider authorized by rules the department makes to use a closed loop referral system.
(b) "Closed loop referral system" means a system that enables efficient outreach, engagement, and care coordination across cross-sector social needs care providers.
(c) " Social needs care" means community-level services and supports that address health-related social needs.
(d) "Social needs care provider" means a person that contracts with the department, directly or indirectly, to provide social needs care, including a: (i) government entity;
(ii) healthcare organization;
(iii) community organization; or
(iv) social service organization.

(2) The department shall implement a closed loop referral system for referrals for the delivery of social care to Medicaid-eligible individuals.
(3) The department shall ensure that the closed loop referral system: (a) notifies authorized users of social needs care requests and referrals;
(b) allows authorized users to securely access relevant information related to the social care needs of individuals the authorized user serves;
(c) allows an individual's information to be accessed only with the individual's consent and consistent with applicable privacy laws;
(d) facilitates communication between referring social needs care providers using a secure chat functi on;
(e) sends social needs care referrals on behalf of an individual receiving social needs care; and
(f) in a single record, tracks and stores: (i) the outcome of a referral; and
(ii) the outcome of services delivered to an individual.

(4) The department shall make rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to implement this section, including rules to establish authorized use and authorized users of the closed loop referral system.

Section 3. Section 26B-6-403 is amended to read:
26B-6-403. Responsibility and authority of division.
(1) For purposes of this section "administer" means to: (a) plan;
(b) develop;
(c) manage;
(d) monitor; and
(e) conduct certification reviews.

(2) The division has the authority and responsibility to: (a) administer an array of services and supports for persons with disabilities and their families throughout the state;
(b) make rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, that establish eligibility criteria for the services and supports described in Subsection (2)(a);
(c) consistent with Section 26B-6-506, supervise the programs and facilities of the Developmental Center;
(d) in order to enhance the quality of life for a person with a disability, establish either directly, or by contract with private, nonprofit organizations, programs of: (i) outreach;
(ii) information and referral;
(iii) prevention;
(iv) technical assistance; and
(v) public awareness;

(e) supervise the programs and facilities operated by, or under contract with, the division;
(f) cooperate with other state, governmental, and private agencies that provide services to a person with a disability;
(g) subject to Subsection (3), ensure that a person with a disability is not deprived of that person's constitutionally protected rights without due process procedures designed to minimize the risk of error when a person with a disability is admitted to an intermediate care facility for people with an intellectual disability, including: (i) the developmental center; and
(ii) facilities within the community;

(h) determine whether to approve providers;
(i) monitor and sanction approved providers, as specified in the providers' contract;
(j) subject to Section 26B-6-410, receive and disburse public funds;
(k) review financial actions of a provider who is a representative payee appointed by the Social Security Administration;
(l) establish standards and rules for the administration and operation of programs conducted by, or under contract with, the division;
(m) approve and monitor division programs to insure compliance with the board's rules and standards;
(n) establish standards and rules necessary to fulfill the division's responsibilities under Part 5, Utah State Developmental Center, and Part 6, Admission to an Intermediate Care Facility for People with an Intellectual Disability, with regard to an intermediate care facility for people with an intellectual disability;
(o) assess and collect equitable fees for a person who receives services provided under this chapter;
(p) maintain records of, and account for, the funds described in Subsection (2)(o);
(q) establish and apply rules to determine whether to approve, deny, or defer the division's services to a person who is: (i) applying to receive the services; or
(ii) currently receiving the services;

(r) in accordance with state law, establish rules: (i) relating to an intermediate care facility for people with an intellectual disability that is an endorsed program; and
(ii) governing the admission, transfer, and discharge of a person with a disability;

(s) manage funds for a person residing in a facility operated by the division: (i) upon request of a parent or guardian of the person; or
(ii) under administrative or court order; and

(t) fulfill the responsibilities described in Section 26B-1-430.

(3) The due process procedures described in Subsection (2)(g): (a) shall include initial and periodic reviews to determine the constitutional appropriateness of the placement; and
(b) with regard to facilities in the community, do not require commitment to the division.

(4) Except as provided in Subsection (5), when the division makes amendments to a contract the division enters into under Subsection (2), the division shall notify a provider under contract with the division at least 30 days before the effective date of the amendments.
(5) The division may waive the 30-day notice requirement described in Subsection (4): (a) if a contractor requests a contract change;
(b) if a service rate is increased; or
(c) in response to a natural disaster or public health emergency.

Section 4. FY 2027 Appropriations.
The following sums of money are appropriated for the fiscal year beginning July 1, 2026, and ending June 30, 2027. These are additions to amounts previously appropriated for fiscal year 2027. Subsection 4(a). Operating and Capital Budgets Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, the Legislature appropriates the following sums of money from the funds or accounts indicated for the use and support of the government of the state of Utah. SOCIAL SERVICES DEPARTMENT OF HEALTH AND HUMAN SERVICES ITEM 1 Department of Health and Human Services - Integrated Health Care Services From General Fund 3,925,900 From Federal Funds 6,752,900 Medicaid Accountable Care Organizations 1,319,800 Medicaid Home and Community Based Services 5,275,000 Medicaid Other Services 4,084,000 The Legislature intends that the Department of Health and Human Services use: (1) $1,925,900 ongoing General Fund appropriation in this item to raise Medicaid provider rates for private duty nursing. (2) $2,000,000 ongoing General Fund appropriation in this item to raise Medicaid provider rates for the New Choices Waiver. ITEM 2 Department of Health and Human Services - Long-Term Services Support From General Fund 4,162,700 From Federal Funds 6,548,500 Aging Waiver Services 162,700 Community Supports Waiver Services 10,548,500 The Legislature intends that the Department of Health and Human Services use: (1) $4,000,000 ongoing General Fund appropriation in this item to raise Medicaid provider reimbursement rates for the Division of Services for People with Disabilities providers, excluding the Limited Supports Waiver providers, and including support coordinators. (2) $162,700 ongoing General Fund appropriation in this item to raise provider reimbursement rates for personal care. ITEM 3 Department of Health and Human Services - Children, Youth, Families From General Fund 2,000,000 Child Family Services 2,000,000 The Legislature intends that the Department of Health and Human Services use the $2,000,000 ongoing General Fund appropriation in this item to raise provider reimbursement rates for the proctor, congregate, and foster care providers housing foster children. ITEM 4 Department of Health and Human Services - Integrated Health Care Services From General Fund 6,799,700 From Federal Funds 12,588,600 Medicaid Accountable Care Organizations 902,900 Medicaid Home and Community Based Services 7,107,100 Medicaid Long Term Care Services 7,911,400 Medicaid Other Services 3,226,300 Expansion Accountable Care Organizations 47,900 Expansion Other Services 192,700 The Legislature intends that the Department of Health and Human Services use: (1) $3,000,000 ongoing General Fund appropriation in this item to raise Medicaid provider reimbursement rates for nursing homes and intermediate care facilities for individuals with intellectual disabilities. (2) $1,962,400 ongoing General Fund appropriation in this item to raise Medicaid provider reimbursement rates for home health. (3) $1,837,300 ongoing General Fund appropriation in this item to raise Medicaid provider reimbursement rates for personal care.

Section 5. Effective Date.
This bill takes effect on May 6, 2026.

3-11-26 12:06 PM