Behavioral Health Rate Methodology Modernization - Workgroup Establishment and Study

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
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SENATE BILL 39
J1 6lr1650
(PRE–FILED)
By: Senator Lam
Requested: November 1, 2025
Introduced and read first time: January 14, 2026
Assigned to: Finance
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: March 19, 2026

CHAPTER ______

AN ACT concerning 1

Behavioral Health – Certified Community Behavioral Health Clinics and 2
Outpatient Mental Health Centers – Reimbursement Rates Rate Methodology 3
Modernization – Workgroup Establishment and Study 4

FOR the purpose of requiring the Maryland Department of Health, rather than the 5
Behavioral Health Administration and the Medical Care Programs Administration, 6
to cond uct a certain rate –setting study; requiring the Department to review and 7
implement certain recommendations and administer certain tools and oversee 8
certain submissions required to support a certain study; requiring the Maryland 9
Health Care Commission to assist the Department with the facilitation of a certain 10
study; altering the date by which the rate–setting study is to be completed; requiring 11
the Secretary of Health, or the Secretary’s designee, to designate a representative of 12
the Administration to be a certain technical liaison; authorizing the Commission, 13
rather than the Department, to require community providers to submit certain 14
information for the completion of a certain report; altering certain requirements 15
related to the submission of a certain interim report and when certain annual reports 16
must be submitted; establishing the Workgroup on Certified Behavioral Health 17
Clinic Implementation and Rate Methodology Modernization in the Behavioral 18
Health Administration Commission to develop certain reimbursement 19
methodologies for certified community behavioral health clinics, outpatient mental 20
health centers, and independent outpatient providers ; requiring the Maryland 21
Department of Health to conduct a certain rate study of outpatient mental health 22
centers in the State; requiring the Department to convene an outpatient mental 23
health services rate reform advisory panel to review and approve a certain rate 24
2 SENATE BILL 39

methodology; requiring the Department to increase the Maryland Medic al 1
Assistance Program reimbursement rate for outpatient mental health centers by a 2
certain percentage in certain fiscal years; and generally relating to certified 3
community behavioral health clinics and outpatient mental health centers 4
behavioral health rate methodology modernization. 5

BY repealing and reenacting, with amendments, 6
Article – Health – General 7
Section 16–201.3(e) and (h) 8
Annotated Code of Maryland 9
(2023 Replacement Volume and 2025 Supplement) 10

BY adding to 11
Article – Health – General 12
Section 7.5–211 and 15–160 13
Annotated Code of Maryland 14
(2023 Replacement Volume and 2025 Supplement) 15

Preamble 16

WHEREAS, The State has operated certified community behavioral health clinics 17
(CCBHC) under limited federal grant funding since 2018, serving thousands of State 18
residents with integrated mental health and substance use care; and 19

WHEREAS, The CCBHC model has demonstrated improvements in access, care 20
coordination, health outcomes, and reductions in emergency department utilization and 21
inpatient stays; and 22

WHEREAS, The State must move from a grant –funded pilot approach to CCBHCs 23
to a sustainable statewide model with a clear rate methodology, ensuring that behavioral 24
health providers can continue to deliver high –quality, evidence–based, value–driven care; 25
and 26

WHEREAS, Outpatient mental health centers (OMHC) are a cornerstone of the 27
State’s behavioral health system, providing community –based treatment for individuals 28
with serious mental health conditions; and 29

WHEREAS, OMHCs are in financial crisis due to inadequate and outdated 30
reimbursement rates that fail to reflect the true cost of service delivery, workforce needs, 31
and compliance requirements; and 32

WHEREAS, The State currently lacks a formal, transparent rate –setting 33
methodology for OM HCs and CCBHCs, leading to inconsistent and unsustainable 34
reimbursement practices; and 35

SENATE BILL 39 3

WHEREAS, The closure of OMHCs, such as in Frederick County, demonstrates the 1
urgent risk to access and continuity of care across the State if rate inadequacies remain 2
unaddressed; and 3

WHEREAS, The General Assembly recognizes the importance of establishing parity 4
between behavioral health and somatic health services, including through transparent, 5
cost–driven rate reform; now, therefore, 6

SECTION 1. BE IT ENACTED B Y THE GENERAL ASSEMBLY OF MARYLAND, 7
That the Laws of Maryland read as follows: 8

Article – Health – General 9

16–201.3. 10

(e) (1) IN THIS SUBSECTION , “COMMISSION” MEANS THE MARYLAND 11
HEALTH CARE COMMISSION. 12

[(1)] (2) [The Behavioral Health Administration and the Medical Care 13
Programs Administration jointly ] ON OR BEFORE JUNE 30, 2028, THE DEPARTMENT 14
shall: 15

(i) Conduct an independent cost –driven, rate –setting study to set 16
community provider rates for community–based behavioral health services that includes a 17
rate analysis and an impact study that considers the actual cost of providing 18
community–based behavioral health services; 19

[(ii) Develop and implement a payment system incorporating the 20
findings of the rate –setting study conducted under item (i) of this paragraph, including 21
projected costs of implementation and recommendations to address any potential shortfall 22
in funding; and] 23

(II) REVIEW AND IMPLEMENT THE RECOMMENDATIONS OF THE 24
WORKGROUP ON BEHAVIORAL HEALTH RATE METHODOLOGY MODERNIZATION 25
ESTABLISHED BY CHAPTER ____ (S.B. 39) OF THE ACTS OF THE GENERAL 26
ASSEMBLY OF 2026; AND 27

(III) ADMINISTER COST –REPORTING TOOLS AND OVERSEE 28
COST–REPORT SUBMISSIONS REQUIRED TO SUPPORT THE STUDY REQUIRED UNDER 29
ITEM (I) OF THIS PARAGRAPH. 30

(3) THE COMMISSION SHALL ASSIST THE DEPARTMENT WITH THE 31
FACILITATION OF THE RATE–SETTING STUDY REQUIRED UNDER PARAGRAPH (2)(I) 32
OF THIS SUBSECTION, INCLUDING BY: 33

4 SENATE BILL 39

[(iii)] (I) [Consult] CONSULTING with stakeholders, including 1
community providers and individuals receiving services[, in conducting the rate–setting 2
study and developing the payment system required by this paragraph]; AND 3

(II) PROVIDING ANALYTICAL SUPPORT AND TECHNICA L 4
ASSISTANCE. 5

(4) THE BEHAVIORAL HEALTH ADMINISTRATION AND THE MEDICAL 6
CARE PROGRAMS ADMINISTRATION JOINTLY SHALL: 7

(I) DEVELOP AND IMPLEMENT A PAYMENT SYSTEM 8
INCORPORATING THE FINDINGS OF THE RATE–SETTING STUDY CONDUCTED UNDER 9
PARAGRAPH (2)(I) OF THIS SUBSECTION; AND 10

(II) CONSULT WITH STAKEHOL DERS, INCLUDING COMMUNITY 11
PROVIDERS AND INDIVIDUALS RECEIVING SERVICES, IN DEVELOPING THE PAYMENT 12
SYSTEM REQUIRED UNDER ITEM (I) OF THIS PARAGRAPH. 13

[(2) The Administration, on or before September 30, 2019, shall complete 14
the study required under paragraph (1)(i) of this subsection.] 15

[(3)] (5) The Administration shall adopt regulations to implement the 16
payment system required by paragraph [(1)] (4)(I) of this subsection. 17

(6) (I) THE SECRETARY, OR THE SECRETARY’S DESIGNEE, SHALL 18
DESIGNATE A REPRESEN TATIVE OF THE ADMINISTRATION TO SER VE AS A 19
TECHNICAL LIAISON BETWEEN THE DEPARTMENT AND THE COMMISSION. 20

(II) THE TECHNICAL LIAISON SHALL: 21

1. PROVIDE TECHNICAL INP UT FOR THE COMPLETIO N 22
OF THE STUDY REQUIRE D UNDER PARAGRAPH (2)(I) OF THIS SUBSECTION 23
REGARDING MEDICAID POLICY , BEHAVIORAL HEALTH RE IMBURSEMENT 24
STRUCTURES, AND EXISTING DATA SOURCES; 25

2. ENSURE CONTINUITY BETWEEN THE DEPARTMENT’S 26
WORK REGARDING THE COMPLETION OF THE STUDY REQUIRED UNDER PARAGRAPH 27
(2)(I) OF THIS SUBSECTION A ND THE COMMISSION’S FACILITATION OF TH E 28
WORKGROUP ON BEHAVIORAL HEALTH RATE METHODOLOGY MODERNIZATION 29
ESTABLISHED UNDER CHAPTER ____ (S.B. 39) OF THE ACTS OF THE GENERAL 30
ASSEMBLY OF 2026; AND 31

SENATE BILL 39 5

3. COORDINATE THE COMMISSION’S ACCESS TO 1
EXISTING ANALYTICAL WORK OR STUDY PREPARATION THAT HAS BEEN COMPLETED 2
BY THE DEPARTMENT IN COMPLYING WITH PARAGRAPH (2) OF THIS SUBSECTION. 3

(h) (1) On or before [December] JANUARY 1, [2018] 2028, the [Department] 4
COMMISSION shall submit an interim report to the Governor and, in accordance with § 5
2–1257 of the State Government Article, the General Assembly on [the]: 6

(I) THE delivery system through which community –based 7
behavioral health services should be provided; 8

(II) THE STATUS OF THE IMP LEMENTATION OF THE 9
RECOMMENDATIONS OF T HE WORKGROUP ON BEHAVIORAL HEALTH RATE 10
METHODOLOGY MODERNIZATION ESTABLISHED UNDER CHAPTER ____ (S.B. 39) OF 11
THE ACTS OF THE GENERAL ASSEMBLY OF 2026; and [any] 12

(III) ANY preliminary recommendations regarding the payment 13
system required under this section. 14

(2) On or before December 1, [2019] 2028, and on or before December 1 15
each year thereafter, the [Department] COMMISSION shall submit a report to the 16
Governor and, in accordance with § 2 –1257 of the State Government Article, the General 17
Assembly on the impact of the rate adjustments and the payment system required under 18
this section on community providers, including the impact on: 19

(i) The wages and salaries paid and the benefits provided to direct 20
care staff and licensed clinicians employed by community providers; 21

(ii) The tenure and turnover of direct care staff and licensed 22
clinicians employed by community providers; and 23

(iii) The ability of community providers to recruit qualified direct 24
care staff and licensed clinicians. 25

(3) The [Department] COMMISSION may require a community provider to 26
submit, in the form and manner required by the [Department] COMMISSION, information 27
that the [Department] COMMISSION considers necessary for completion of the report 28
required under paragraph (2) of this subsection. 29

SECTION 2. AND BE IT FURTHER ENACTED, That: 30

(a) There is a Workgroup on Behavioral Health Rate Methodology Modernization 31
in the Maryland Health Care Commission. 32

6 SENATE BILL 39

(b) The purpose of the Workgroup is to develop transparent, cost –based 1
reimbursement methodologies for certified community behavioral health clinics, outpatient 2
mental health centers, and independent outpatient providers using federally required and 3
existing cost–study data as the foundation for future rate reform. 4

(c) The Workgroup consists of the following members: 5

(1) one member of the Senate of Maryland, appointed by the President of 6
the Senate; 7

(2) one member of the House of Delegates, appointed by the Speaker of the 8
House; 9

(3) the Executive Director of the Maryland Health Care Commission, or the 10
Executive Director’s designee; 11

(4) one representative of the Maryland Medical Assistance Program, 12
designated by the Secretary of Health; 13

(5) the representative of the Behavioral Health Administration designated 14
as technical liaison under § 16 –201.3(e)(6) of the Health – General Article, as enacted by 15
Section 1 of this Act; 16

(6) three representatives of community behavioral health providers 17
designated by the Community Behavioral Health Association of Maryland, including: 18

(i) at least one provider from a certified community behavioral 19
health clinic participating in the federal demonstration; and 20

(ii) at least one provider from an outpatient mental health center; 21

(7) one representative of the Licensed Clinical Professional Counselors of 22
Maryland, designated by the President of the Association; 23

(8) one representative of MedChi, the Maryland State Medical Society, 24
designated by the Executive Director of MedChi; and 25

(9) the following members, jointly appointed by the Speaker of the House 26
and the President of the Senate: 27

(i) one representative of a statewide hospital association; 28

(ii) one representative of a specialty psychiatric hospital; 29

(iii) one representative of a consumer or peer –led behavioral health 30
advocacy organization; 31

SENATE BILL 39 7

(iv) one independent ac tuarial or health –economics expert with 1
Medicaid experience; and 2

(v) any additional members determined necessary by the cochairs in 3
consultation with the Workgroup. 4

(d) The President of the Senate and the Speaker of the House jointly shall 5
designate one legislative member and one provider member to serve as cochairs of the 6
Workgroup. 7

(e) The Maryland Health Care Commission, in consultation with the Maryland 8
Department of Health, the Department of Legislative Services, and the Community 9
Behavioral Health Association of Maryland, shall provide staff for the Workgroup. 10

(f) A member of the Workgroup: 11

(1) may not receive compensation as a member of the Workgroup; but 12

(2) is entitled to reimbursement for expenses under the Standard State 13
Travel Regulations, as provided in the State budget. 14

(g) The Workgroup shall: 15

(1) use the federally required certified community behavioral health clinic 16
cost study as the baseline dataset for evaluating outpatient mental health service costs in 17
the State; 18

(2) review and analyze cost drivers for outpatient behavioral health 19
services, including: 20

(i) staffing mix and workforce models; 21

(ii) medical director and clinical supervision requirements; 22

(iii) contractor versus salaried structures; 23

(iv) geographic and volume variation; 24

(v) compliance with State and federal regulatory requirements, 25
including COMAR 10.63; 26

(vi) differentiation of costs between nonprofit and for –profit 27
organizations; 28

(vii) ratio of services delivered by telehealth; and 29

(viii) size and volume of group–based services; 30
8 SENATE BILL 39

(3) approve methodologies for analyzing outpatient costs and the Maryland 1
Department of Health’s completion of the study required under § 16 –201.3(e)(2)(i) of the 2
Health – General Article, as enacted by Section 1 of this Act, that include: 3

(i) cost reporting structures; 4

(ii) sampling methodologies that exclude all programs founded after 5
2020; 6

(iii) allocation of overhead and administrative costs; 7

(iv) differentiation of the treatment of revenues of providers that are 8
from Medicaid and sources other than Medicaid; and 9

(v) modeling approaches used to estimate sustainable 10
reimbursement rates; 11

(4) evaluate reimbursement methodologies used in other states and federal 12
demonstration programs; 13

(5) (i) subject to item (ii) of this item, develop one or more cost –based, 14
rate–setting methodologies applicable to certified community behavioral health clinics, 15
outpatient mental health centers, and independent outpatient providers that include: 16

1. re–evaluating and rebasing reimbursement rates under 17
the Certified Community Behavioral Health Clinic Payment Model in demonstration year 18
two and every 3 years thereafter; 19

2. assumptions, cost –model components, and inflationary 20
adjustments; and 21

3. integration of data and analyses produced under the 22
cost–driven rate–setting study required under § 16 –201.3(e)(2)(i) of the Health – General 23
Article, as enacted by Section 1 of this Act, to the extent the data and analyses are available; 24
and 25

(ii) build on all previously completed and ongoing cost–reporting and 26
analytical work related to setting community provider rates for community –based 27
behavioral health services in developing methodologies under item (i) of this item, 28
including, to the extent available: 29

1. the independent cost –driven analysis required under § 30
16–201.3(e)(2)(i) of the Health – General Article, as enacted by Section 1 of this Act; 31

2. the certified community behavioral health clinic cost and 32
rate study required by the 2025 Joint Chairmen’s Report; and 33
SENATE BILL 39 9

3. cost reporting tools and submission review processes 1
required under § 16–201.3(e)(2)(iii) of the Health – General Article, as enacted by Section 2
1 of this Act; 3

(6) ensure all recommended methodologies comply with both federal 4
Medicaid financing rules and the Medicaid Upper Payment Limit and provide 5
recommendations on strategies to implement the recommended methodologies while 6
remaining compliant with federal requirements; 7

(7) identify a ny regulatory or statutory barriers to statewide 8
implementation of cost–based, rate–setting methodologies; and 9

(8) propose options for phased statewide implementation of cost –based, 10
rate–setting methodologies when fiscal conditions allow. 11

(h) (1) On or before June 1, 2027, the Workgroup shall submit an interim 12
report to the Governor and, in accordance with § 2 –1257 of the State Government Article, 13
the General Assembly. 14

(2) On or before December 1, 2027, the Workgroup shall submit a final 15
report to the Governor and, in accordance with § 2 –1257 of the State Government Article, 16
the General Assembly that includes: 17

(i) recommended rate–setting methodologies; 18

(ii) assumption and cost–model components; 19

(iii) options for phased implementation; 20

(iv) estimated fiscal considerations; and 21

(v) any recommended statutory or regulatory changes. 22

(i) This section does not: 23

(1) require an immediate rate increase; 24

(2) mandate an appropriation; or 25

(3) create a fiscal obligation in the absence of subsequent legislative or 26
budgetary action. 27

7.5–211. 28

10 SENATE BILL 39

(A) THERE IS A WORKGROUP ON CERTIFIED COMMUNITY BEHAVIORAL 1
HEALTH CLINIC IMPLEMENTATION AND RATE METHODOLOGY IN THE 2
ADMINISTRATION. 3

(B) THE WORKGROUP CONSISTS OF THE FOLLOWING MEMBERS: 4

(1) TWO MEMBERS OF THE SENATE OF MARYLAND, APPOINTED BY 5
THE PRESIDENT OF THE SENATE; 6

(2) TWO MEMBERS OF THE HOUSE OF DELEGATES, APPOINTED BY 7
THE SPEAKER OF THE HOUSE; 8

(3) THE DEPUTY SECRETARY OF BEHAVIORAL HEALTH, OR THE 9
DEPUTY SECRETARY’S DESIGNEE; AND 10

(4) THE FOLLOWING MEMBERS, APPOINTED BY THE SECRETARY: 11

(I) ONE REPRESENTATIVE OF THE MARYLAND MEDICAID 12
ADMINISTRATION; 13

(II) THREE REPRESENTATIVES OF COMMUNITY BEHAVIO RAL 14
HEALTH PROVIDERS, INCLUDING AT LEAST ONE PROVIDER OPERATING A CERTIFIED 15
COMMUNITY BEHAVIORAL HEALTH CLINIC THROUGH A FEDERAL GRANT; 16

(III) ONE REPRESENTATIVE OF A STATEWIDE HOSPITAL 17
ASSOCIATION; 18

(IV) ONE REPRESENTATIVE OF A SPECIALTY PSYCHIAT RIC 19
HOSPITAL; 20

(V) ONE REPRESENTATIVE OF A CONSUMER OR PEER –LED 21
BEHAVIORAL HEALTH ADVOCACY ORGANIZATION; AND 22

(VI) ANY ADDITIONAL MEMBER S AS DETERMINED NECE SSARY 23
BY THE COCHAIRS IN CONSULTATION WITH THE WORKGROUP. 24

(C) THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE 25
JOINTLY SHALL DESIGN ATE ONE LEGISLATIVE MEMBER AND ONE PROVI DER 26
MEMBER TO SERVE AS COCHAIRS OF THE WORKGROUP. 27

(D) THE COMMUNITY BEHAVIORAL HEALTH ASSOCIATION OF MARYLAND, 28
IN COLLABORATION WIT H THE DEPARTMENT, MAY PROVIDE STAFF FO R THE 29
WORKGROUP. 30
SENATE BILL 39 11

(E) A MEMBER OF THE WORKGROUP: 1

(1) MAY NOT RECEIVE COMPE NSATION AS A MEMBER OF THE 2
WORKGROUP; BUT 3

(2) IS ENTITLED T O REIMBURSEMENT FOR EXPENSES UNDER THE 4
STANDARD STATE TRAVEL REGULATIONS, AS PROVIDED IN THE STATE BUDGET. 5

(F) THE WORKGROUP SHALL: 6

(1) REVIEW THE COST OF OP ERATING CERTIFIED CO MMUNITY 7
BEHAVIORAL HEALTH CL INICS IN THE STATE, INCLUDING STAFF , 8
INFRASTRUCTURE, AND COMPLIANCE REQUIREMENTS; 9

(2) EVALUATE RATE METHODO LOGIES USED IN OTHER STATES FOR 10
CERTIFIED COMMUNITY BEHAVIORAL HEALTH CL INICS AND RECOMMEND AN 11
APPROPRIATE PROSPECT IVE PAYMENT SYSTEM O R ALTERNATIVE RATE 12
METHODOLOGY FOR THE STATE; 13

(3) ASSESS THE FINANCIAL AND CLINICAL OUTCOME S OF THE 14
STATE’S EXISTING CERTIFIED COMMUNITY BEHAVIORAL HEALTH CLINIC 15
GRANTEES, INCLUDING DATA ON UT ILIZATION, QUALITY MEASURES , AND COST 16
OFFSETS; 17

(4) RECOMMEND STRATEGIES TO INTEGRATE CERTIFI ED 18
COMMUNITY BEHAVI ORAL HEALTH CLINICS INTO THE STATE’S BEHAVIORAL 19
HEALTH AND MARYLAND MEDICAL ASSISTANCE PROGRAM FINANCING SYS TEM, 20
INCLUDING ALIGNMENT WITH THE ACHIEVING HEALTHCARE EFFICIENCY 21
THROUGH ACCOUNTABLE DESIGN (AHEAD) MODEL AND OTHER FEDE RAL 22
INITIATIVES; 23

(5) IDENTIFY ANY REGULATOR Y OR STATUTORY BARRI ERS TO 24
STATEWIDE IMPLEMENTA TION OF CERTIFIED CO MMUNITY BEHAVIORAL H EALTH 25
CLINICS, INCLUDING LICENSURE , REPORTING, AND DATA –SHARING 26
REQUIREMENTS; AND 27

(6) PROPOSE A TIMELINE FO R STATEWIDE IMPLEMEN TATION AND 28
SUSTAINABILITY OF CERTIFIED COMMUNITY BEHAVIORAL HEALTH CLINICS. 29

(G) ON OR BEFORE DECEMBER 1, 2027, THE WORKGROUP SHALL REPORT 30
ITS FINDINGS AND REC OMMENDATIONS TO THE GOVERNOR AND, IN ACCORDANCE 31
WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, THE GENERAL ASSEMBLY. 32
12 SENATE BILL 39

SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 1
as follows: 2

Article – Health – General 3

15–160. 4

(A) THE DEPARTMENT SHALL COND UCT A COST –DRIVEN RATE STUDY OF 5
OUTPATIENT MENTAL HEALTH CENTERS IN THE STATE TO DETERMINE: 6

(1) THE ACTUAL COST OF PROVIDING OUTPATIENT MENTAL HEALTH 7
CENTER SERVICES , INCLUDING PERSONNEL , OVERHEAD, AND COMPLIANCE 8
REQUIREMENTS; 9

(2) THE ADEQUACY OF CURRENT PROGRAM REIMBURSEMENT RATES 10
RELATIVE TO THE COSTS IDENTIFIED UNDER ITEM (1) OF THIS SUBSECTION; AND 11

(3) A METHODOLOGY FOR ESTA BLISHING SUSTAINABLE , 12
COST–BASED REIMBURSEMENT RATES THAT ALIGN WIT H ACCESS , WORKFORCE 13
RETENTION, AND PARITY WITH SOMATIC HEALTH CARE. 14

(B) IN CONDUCTING THE STUDY REQUIRED UNDER SUBSECTION (A) OF THIS 15
SECTION, THE DEPARTMENT SHALL: 16

(1) SOLICIT INPUT FROM OU TPATIENT MENTAL HEAL TH CENTER 17
PROVIDERS, COMMUNITY BEHAVIORAL HEALTH ASSOCIATIONS , CONSUMER 18
ADVOCACY ORGANIZATIONS, AND OTHER RELEVANT STAKEHOLDERS; 19

(2) REVIEW RATE METHODOLO GIES FROM OTHER STAT ES AND 20
FEDERAL DEMONSTRATION PRO GRAMS, INCLUDING CERTIFIED COMMUNITY 21
BEHAVIORAL HEALTH CLINICS; 22

(3) CONSIDER THE IMPACT O F INADEQUATE REIMBUR SEMENT ON 23
SERVICE ACCESS , PROVIDER SOLVENCY , WORKFORCE RECRUITMEN T AND 24
RETENTION, CONTINUITY OF CARE , AND EMERGENCY ROOM U TILIZATION AND 25
BOARDING; 26

(4) CONSIDER SOCIETAL IMP ACTS, INCLUDING COSTS , OF 27
INADEQUATE REIMBURSE MENT ON HOMELESSNESS , CRIMINAL JUSTICE 28
INVOLVEMENT, AND UNEMPLOYMENT; AND 29

(5) DEVELOP RECOMMENDATIO NS, INCLUDING LEGISLATIV E AND 30
BUDGETARY RECOMMENDA TIONS, FOR A TRANSPARENT , COST–BASED 31
SENATE BILL 39 13

RATE–SETTING METHODOLOGY FOR OUTPATIENT MENTA L HEALTH CENTER 1
SERVICES. 2

(C) (1) THE DEPARTMENT SHALL CONV ENE AN OUTPATIENT ME NTAL 3
HEALTH CENTERS RATE REFORM ADVISORY PANEL THAT INCLUDES: 4

(I) AT LEAST THREE REPRES ENTATIVES OF OUTPATI ENT 5
MENTAL HEALTH CENTER PROVIDERS OF VARYING SIZE AND GEOGRAPHY; 6

(II) ONE INDEPENDENT ACTUA RIAL OR HEALTH ECONOMI CS 7
EXPERT; AND 8

(III) ANY OTHER STAKEHOLDER S IDENTIFIED BY THE 9
DEPARTMENT. 10

(2) THE ADVISORY PANEL SH ALL REVIEW AND APPRO VE THE 11
RATE–SETTING METHODOLOGY RECOMMENDED BY THE DEPARTMENT UNDER 12
SUBSECTION (A)(3) OF THIS SECTION. 13

(D) (1) FOR FISCAL YEAR 2026 AND FISCAL YEAR 2027, THE 14
DEPARTMENT SHALL INCREASE THE RATE OF REI MBURSEMENT FOR OUTPATIENT 15
MENTAL HEALTH CENTERS BY AT LEAST 3% BASED ON THE REIMBURSEMENT RATE 16
IN THE IMMEDIATELY PRECEDING FISCAL YEAR. 17

(2) (I) THE GOVERNOR’S PROPOSED BUDGET FO R FISCAL YEAR 18
2027 AND FISCAL YEAR 2028 SHALL INCLUDE RATE ADJUSTMENTS FOR OUTPATIENT 19
MENTAL HEALTH CENTERS OF AT LEAST 3% BASED ON THE FUNDING PROVIDED IN 20
THE LEGISLATIVE APPR OPRIATION FOR THE IM MEDIATELY PRECEDING FISCAL 21
YEAR FOR OUTPATIENT MENTAL HEALTH CENTERS. 22

(II) THE GOVERNOR’S PROPOSED BUDGET FO R FISCAL YEAR 23
2028 AND EACH FISCAL YEAR THEREAFTER SHALL INC LUDE FUNDING FOR 24
OUTPATIENT HEALTH CE NTERS SUFFICIENT TO IMPLEMENT THE COST –BASED 25
REIMBURSEMENT METHODOLOGY ADOPTED BY THE DEPARTMENT IN ACCORDANCE 26
WITH THIS SECTION. 27

(E) ON OR BEFORE JULY 1, 2027, THE DEPARTMENT SHALL ADOP T 28
REGULATIONS ESTABLISHING A COST–BASED REIMBURSEMENT METHODOLOGY FOR 29
OUTPATIENT MENTAL HE ALTH CENTER SERVICES THAT INCORPORATES TH E 30
FINDINGS OF THE STUDY REQUIRED UNDER SUBSECTION (A) OF THIS SECTION AND 31
THE INPUT OF THE OUT PATIENT MENTAL HEALT H CENTERS RATE REFOR M 32
ADVISORY PANEL. 33

14 SENATE BILL 39

(F) (1) ON OR BEFORE DECEMBER 1 EACH YEAR , BEGINNING IN 2026, 1
UNTIL THE COST –BASED REIMBURSEMENT METHODOLOGY RECOMMEN DED I N 2
ACCORDANCE WITH THIS SECTION IS FULLY IMP LEMENTED, THE DEPARTMENT 3
SHALL REPORT ITS FIN DINGS AND RECOMMENDA TIONS TO THE SENATE FINANCE 4
COMMITTEE AND THE HOUSE HEALTH AND GOVERNMENT OPERATIONS 5
COMMITTEE, IN ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT 6
ARTICLE. 7

(2) THE REPORT REQUIRED U NDER PARAGRAPH (1) OF THIS 8
SUBSECTION SHALL INCLUDE: 9

(I) A PROGRESS UPDATE ON T HE STUDY REQUIRED UN DER 10
SUBSECTION (A) OF THIS SECTION; 11

(II) AN IMPLEMENTATION TIM ELINE FOR THE 12
IMPLEMENTATION OF TH E REIMBURSEMENT METH ODOLOGY REQUIRED BY THIS 13
SECTION; 14

(III) THE ESTIMATED FISCAL IMPACT AND FUNDING N EEDS 15
RELATED TO THE IMPLEMENTATION OF THE REIMBURSEMENT METHODOLOGY; AND 16

(IV) INTERIM OUTCOMES FOR OUTPATIENT MENTAL HE ALTH 17
SERVICES PROVIDERS RESULTING FROM THE ANNUAL RATE INCREASES REQUIRED 18
BY THIS SECTION. 19

SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 20
1, 2026. Section 1 2 of this Act shall remain effective for a period of 2 years and, at the end 21
of June 30, 2028, Section 1 2 of this Act, with no further action required by the General 22
Assembly, shall be abrogated and of no further force and effect. 23

Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.