What’s happening: This week the General Assembly turned its attention to work on the budget bills for state fiscal years (SFY) 2025-26.

• The budgets developed by the House of Delegates and Senate appropriations committees include good news for providers.

Good budget news: Both the House and Senate are funding the inflation increase for Medicaid nursing facility rates, which is currently forecasted as a 3.1 percent increase. The actual inflation adjustment will be issued closer to the start of the state fiscal year as DMAS calculates the new rates.

More funding for Value-Based Purchasing (VBP): Although they differ in their approaches, the House and Senate have also provided more funds for the Medicaid VPB Program.

• The House has included a total of $81.6 million for the next two state fiscal years (SFY).
  • For SFY 2025 / Year 3 payments, VBP funding would be increased by $40.8 million, which would be continued for SFY 2026 / Year 4 payments.
• The Senate budget inflates the VBP funding pool for SFY 2025. This is important as it is required as part of the staffing mandate legislation passed in 2023. It will be a priority to advocate for continued application of the inflation factor in future budget years.

Other budget items of note: Neither body chose to adopt the Medicaid base rate reforms or increases in the assisted living auxiliary grant we supported.

Next steps: We are still several steps away from knowing the final outcome on the budget.

• In the coming days, the House and Senate will reject the other’s budget and appoint conferees to work out the differences.
• If the Session schedule holds, a final budget would be completed and voted upon on March 9.
• VHCA-VCAL will ask the budget conferees to support the House-proposed funding level for the VBP Program and keep you apprised of the final outcome.

On the legislative front, VHCA-VCAL’s priority legislation on LTSS Screening and medication aides in nursing facilities continue to advance.

• The Senate unanimously passed the House version of the LTSS Screening bill, HB 291. The companion legislation, SB 24, is expected to receive a favorable vote in the House in the coming days. VHCA-VCAL will ask Gov. Glenn Youngkin to sign the legislation.
• The Senate Education and Health Committee favorably reported HB 349; it is headed for a vote by the full Senate.