Budget Initiatives
The Rhode Island Executive Office of Health and Human Services (EOHHS) and Rhode Island Medicaid are in the process of implementing the initiatives passed in the FY2026 Budget as Enacted. The initiatives are outlined below:
EOHHS is implementing increased reimbursement rates for primary care services, effective October 1, 2025, as enacted in the FY2026 Budget. The RI Medicaid primary care rates are being updated to align with Medicare rates and will be updated annually.
The scheduled rate increase requires a great deal of coordination between the State, federal partners, managed care organizations, and providers to successfully implement. The following workstreams must make a series of updates prior to these new rates going live.
Rhode Island Medicaid has consulted with MCOs, other states, and stakeholders to establish the coverage and a reimbursement methodology for interprofessional consultations. As a new program, the initiative requires several systems modifications and decision points. The State Plan Amendment (SPA) is currently in public comment status and will be submitted to the Centers for Medicare and Medicaid Services (CMS) before the end of the year. While federal approval and required system updates are still pending, coverage and reimbursement will be applied retroactively to October 1, 2025, contingent upon the state receiving federal authority.
The SFY26 enacted budget requires EOHHS to conduct a three-year pilot that eliminates prior authorization requirements for non-pharmaceutical services, treatments, and procedures ordered by a primary care provider in the normal course of providing primary care treatment. The legislation defines prior authorization as “the pre-service assessment for purposes of utilization review that a Primary Care Provider is required by Medicaid fee-for-service or managed care organization to undergo before a covered healthcare service is approved for a patient.” EOHHS is working with MCOs to finalize implementation guidance for the PA Pilot program. This guidance will be made available on the EOHHS website and information will be shared with providers. Implementation requires changes to both MCO and FFS billing/reimbursement systems and is expected to require approximately 90 days.
Rhode Island is implementing a specialized rate for long-term behavioral health inpatient hospital services for adults with a primary mental health diagnosis who require acute care on a long-term basis. As part of that implementation, Medicaid drafted a SPA, which was posted for public comment. While federal approval and required system updates are pending, coverage and reimbursement will be applied retroactively to the effective date of October 1, 2025, contingent upon the state receiving federal authority.
EOHHS is working to implement MRSS as a standalone Medicaid State Plan benefit with an effective date of 10/1/2026. As part of that work, EOHHS is drafting a State Plan Amendment for submission to CMS, developing rates and partnering with DCYF on MRSS licensing regulations.
When the State revises its rate methodologies or establishes new services, the Medicaid Program coordinates necessary updates to relevant systems, contracts, and policies with its managed-care organizations (MCOs), federal partners, and providers.
- State Plan Amendments: State plan amendments (SPAs) first must go through a 30-day public comment period before they can be submitted to CMS for review and approval. EOHHS must complete a submission package for CMS which includes public and tribal notices, revised state plan pages, a fiscal impact summary, and funding questions. Once submitted, CMS has 90 days to review the amendments or request additional information (RAI). If CMS issues an RAI, the 90-day clock is stopped, and the state works with CMS to answer any questions. The approval from CMS is retroactive to the effective date submitted with the SPA.
- Finance Updates: Medicaid Finance staff must prepare an updated fee schedule for every code and modifier combination affected by the Enacted Budget. This includes error-checking, identifying codes necessary for a managed care minimum fee schedule, cross-referencing fee-for-service billing codes with MCO billing codes, and preparing the rate sheet so that it contains all the information necessary to update the Medicaid Management Information System (MMIS), which is the system that processes payments for any Medicaid claims submitted according to the update fee schedule.
- MCO Management and Oversight Updates: The managed care oversight team must amend contracts to reflect updated rates and direct MCOs to update their provider amendments with the changes. MCOs have 45 days to review proposed contract changes and submit questions and concerns to EOHHS. Once the amended contract is fully executed, the MCOs have 90 days to implement all changes. Implementation may include renegotiating changes to provider contracts, updating computer and billing systems and ensuring that providers are paid correctly under their new agreements. MCO subcontractors must also be compliant with the changes.