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sSB499 / File No. 488 1
General Assembly File No. 488
February Session, 2026 Substitute Senate Bill No. 499
Senate, April 7, 2026
The Committee on Human Services reported through SEN.
LESSER of the 9th Dist., Chairperson of the Committee on the
part of the Senate, that the substitute bill ought to pass.
AN ACT CONCERNING MEDICAID RATE INCREASES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective July 1, 2026) (a) As used in this section, (1) 1
"Medicaid rate study" means the study commissioned by the 2
Department of Social Services pursuant to section 1 of public act 23-186, 3
(2) "five-state rate benchmark" means the average of rates for the same 4
health care services in Maine, Massachusetts, New Jersey, New York 5
and Oregon, and (3) "Medicare Economic Index" means a measure of 6
inflation for physicians with respect to their practice costs and wage 7
levels as calculated by the Centers for Medicare and Medicaid Services. 8
(b) Within available appropriations, the Commissioner of Social 9
Services shall phase in increases to Medicaid provider rates in 10
accordance with the Medicaid rate study. The commissioner shall phase 11
in the rate increases commencing on July 1, 2026, such that by June 30, 12
2029, all such rates equal (1) not less than seventy -five per cent of the 13
most recent Medicare rates for the same health care services, or (2) for 14
such services with no corresponding Medicare rates, a percentage of the 15
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five-state rate benchmark that results in an equivalent rate increase. 16
(c) On and after June 30, 2029, the commissioner shall adjust such 17
rates every year (1) to not less than seventy -five per cent of the most 18
recent Medicare rates for the same health care services, (2) to an 19
equivalent percentage of the five-state rate benchmark for such services 20
with no corresponding Medicare rates, or (3) by increasing such rates by 21
any percentage increase in the Medicare Economic Index. 22
(d) Any review or rebasing of Medicaid rates shall include those rates 23
(1) required to be studied pursuant to the Medicaid rate study; and (2) 24
with no corresponding (A) Medicare rate for the same health care 25
service, or (B) average five -state rate benchmark rate included in the 26
Medicaid rate study. If any one state within the five -state rate 27
benchmark group has a corresponding rate for the same or substantially 28
similar health care service, such rate shall be used for comparison in 29
such review. 30
(e) The commissioner shall streamline and consolidate existing fee 31
schedules used for provider or service reimbursement so that every 32
provider is reimbursed using the same fee schedule. In streamlining and 33
consolidating existing fee schedules, the commissioner shall 34
incorporate, to the extent applicable, the most recent Medicare fee 35
schedule for services covered by Medicare as well as Medicaid. 36
Sec. 2. (NEW) ( Effective July 1, 2026 ) (a) The Council on Medical 37
Assistance Program Oversight, established pursuant to section 17b -28 38
of the general statutes, shall develop and implement an ongoing 39
systemic review of Medicaid provider reimbursement rates to ensure 40
rates are adequate to sustain a sufficient provider pool to provide 41
Medicaid member access to high-quality care. 42
(b) Not later than January 15, 2027, and annually thereafter, the 43
council shall file a report, in accordance with the provisions of section 44
11-4a of the general statutes, with the joint standing committees of the 45
General Assembly having cognizance of matters relating to 46
appropriations and the budgets of state agencies and human services. 47
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The report shall include the council's recommendations on necessary 48
appropriations to ensure Medicaid providers are compensated for 49
health care services in accordance with section 1 of this act. 50
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2026 New section
Sec. 2 July 1, 2026 New section
Statement of Legislative Commissioners:
In Section 1(b) and (d), "five -state benchmark" or "benchmark" was
changed to "five-state rate benchmark" and "public act 23 -186" was
changed to "the Medicaid rate study" for consistency with the defined
term.
HS Joint Favorable Subst. -LCO
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The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of
the General Assembly, solely for purposes of information, summarization and explanation and do not
represent the intent of the General Assembly or either chamber thereof for any purpose. In general,
fiscal impacts are based upon a variety of informational sources, including the analyst’s professional
knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final
products do not necessarily reflect an assessment from any specific department.
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 27 $ FY 28 $
Social Services, Dept. GF - Cost See Below See Below
Note: GF=General Fund
Municipal Impact: None
Explanation
The bill results in a significant cost to the Department of Social
Services due to phasing -in increases to Medicaid provider rates by
6/30/29.
The bill requires that Medicaid rates for various providers be
increased to (1) 75% of the Medicare rate for similar services, or (2) to a
similar percentage increase based on the five-state benchmark included
in the Medicaid rate study supported by PA 23 -186. For context, the
study reviewed costs to adjust Medicaid rates to 80% of the Medicare
fee schedule and five-state rates for Maine, Massachusetts, New Jersey,
New York and Oregon. Based on those factors, state costs are estimated
at approximately $150 million when annualized, with additional annual
increases incurred to reflect updated fee schedules, benchmarks, or
increases in the Medicare Economic Index (MEI).
For purposes of an example, the table below details state costs by
fiscal year if each set of rate increases is supported by equal annualized
funding.
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Example: Phase-in of Medicaid
Provider Rates (state share, $ in millions)
FY 27 FY 28 FY 29
Year 1 Costs 50.0 50.0 50.0
Year 2 Costs - 50.0 50.0
Year 3 Costs - - 50.0
Total 50.0 100.0 150.0
- assumes rate increases are effective July
1 of each year.
The actual annual cost to increase rates depends on the provider
group under review and associated funding necessary to meet the
benchmark, within the required timeframe.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to the Medicare fee schedule, five-state
rate benchmarks, or any percentage increase in MEI.
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OLR Bill Analysis
sSB 499
AN ACT CONCERNING MEDICAID RATE INCREASES.
SUMMARY
This bill requires the Department of Social Services (DSS)
commissioner to increase Medicaid provider rates, within available
appropriations, in accordance with the Medicaid rate study required
under PA 23-186. Among other things, the study generally recommends
using (1) Medicare as a benchmark or (2) other states’ Medicaid rates to
update rates initially and adopting an independent rate model for future
years. DSS must phase in these rate increases starting July 1, 2026,
through June 30, 2029, and then make annual rate adjustments after that
date.
The bill also requires the DSS commissioner to streamline and
consolidate existing fee schedules used for provider or service
reimbursement so that the same fee schedule is used to reimburse every
provider. The bill requires her, to the extent applicable, to incorporate
the most recent Medicare fee schedule for services covered by both
Medicare and Medicaid.
Lastly, the bill requires the Council on Medical Assistance Program
Oversight (MAPOC) to develop and implement an ongoing systemic
review of Medicaid provider reimbursement rates to ensure rates are
adequate to sustain a sufficient provider pool to provide Medicaid
enrollees access to high -quality care. The bill also requires MAPOC to
report annually, starting by January 15, 2027, to the Appropriations and
Human Services committees on its recommendations for appropriations
needed to ensure Medicaid provider compensation meets the bill’s
requirements.
EFFECTIVE DATE: July 1, 2026
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MEDICAID PROVIDER RATE CHANGES
Rate Increase Phase-in
The bill requires the DSS commissioner to phase in Medicaid
provider rate increases in a way so that by June 30, 2029, the rates for all
providers are equal to:
1. at least 75% of the most recent Medicare rates for the same health
care services, or,
2. for services with no corresponding Medicare rates, a percentage
of the five-state rate benchmark that results in an equivalent rate
increase.
Under the bill, the “five -state rate benchmark” is the average of the
rates for the same health care services in Maine, Massachusetts, New
Jersey, New York, and Oregon.
Annual Adjustments
Starting June 30, 2029, the bill requires the DSS commissioner to
adjust the Medicaid provider rates annually either according to the two
requirements described above for the end of the phase -in or by
increasing the rates by any percentage increase in the “Medicare
Economic Index,” which is a measure of inflation for physicians’
practice costs and wage levels as calculated by the federal Centers for
Medicare and Medicaid Services.
Rate Review or Rebasing
The bill requires any review or rebasing of Medicaid rates to include
those rates that (1) had to be studied as part of the Medicaid rate study
required under PA 23 -186 and (2) have no corresponding (a) Medicare
rate or (b) average five -state benchmark rate in the PA 23 -186 study. If
Maine, Massachusetts, New Jersey, New York, or Oregon has a
corresponding rate for the same or a substantially similar health care
service, the bill requires that rate to be included in the review for
comparison.
By law, PA 23-186 required a two-part study of Medicaid rates, with
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the first part examining rates for physician specialists, dentists, and
behavioral health providers and the second part examining all other
aspects of the Medicaid program, including ambulance services,
federally qualified health centers, specialty hospita ls, complex nursing
care, and methadone maintenance.
BACKGROUND
Related Bill
sHB 5561, favorably reported by the Human Services Committee,
requires rate increases for specific providers, including certain dental
clinics, psychologists, and emergency room physicians, among others.
COMMITTEE ACTION
Human Services Committee
Joint Favorable
Yea 23 Nay 0 (03/19/2026)