Health centers to withdraw CT Medicaid rate petition after budget earmark

The Community Health Center Association of Connecticut, or CHCACT, will withdraw a petition sent to the state in March demanding the administration admit it was in violation of federal law governing reimbursements for care provided to low-income patients on Medicaid.

The decision to stand down follows a deal between CHCACT and the state included in the 2026-27 biennial budget passed by legislators last week. The budget earmarks a total of $26.4 million over three years to increase how much the state pays the health centers for care provided to patients with Medicaid, known as HUSKY in Connecticut.

“This was a true negotiation,” Deb Polun, chief strategy officer at CHCACT, said. “It’s about getting health centers to a place where they’re more financially sustainable and able to serve all people. And having Medicaid rates go up will benefit all health center patients and really the entire community.”

Federally qualified community health centers provide health care services to patients who may not otherwise have access to them, and they don’t turn away anyone who cannot pay. In 2023, nearly 70% of Connecticut’s FQHC patients had incomes at or below the federal poverty level, according to data presented in the petition.

Overall, the budget allocates $15 million in fiscal year 2026 and $45 million in FY 2027 to boost Medicaid reimbursement rates for providers. Out of that pot of money, the health centers will receive $5 million in FY 2026 and an additional $7 million in FY 2027, a spokesperson with the state’s Office of Policy and Management confirmed. The legislation also secures an additional $14 million for the health centers in FY 2028.

If the rate at which the federal government matches state spending on Medicaid doesn’t change, the agreement would bring in an additional $15 million, $36 million and $80 million in combined state and federal Medicaid dollars to health centers over the next three fiscal years, respectively, Polun said.

“We were very pleased with that compromise,” she added.

In March, CHCACT sent what’s known as a “declaratory ruling request” to DSS asserting that the agency had not been complying with laws that require periodic reviews of, and increases to, Medicaid rates based on changes to services provided by health centers.

An analysis included in the filing found Connecticut’s average FQHC Medicaid rate to be “at the bottom of the spectrum” in New England, at $163.37 per visit, compared to $297 in New Hampshire, $241.96 in Massachusetts and $196.79 in Vermont.

As a result of DSS’s actions, community health centers have had to freeze hiring and reduce or eliminate important services, Joanne Borduas, CEO of Community Health and Wellness Center said at the time of the filing.

“Every FQHC’s Medicaid rates must be periodically adjusted to account for all increases (or decreases) to the scope of the medical, dental, and behavioral-health services that the FQHC provides to Medicaid patients,” the filing states. “DSS has done virtually everything in its power not to honor its obligation under the Medicaid laws to pay FQHCs reimbursement rates that reflect cost increases attributable to changes in their scope of services.”

In general, community health centers get paid a fixed rate by Medicaid per visit for medical, dental and behavioral health services. That fee can vary based on a facility’s size, volume of patients and the extent of services provided. Federal law requires that those rates get periodically adjusted to account for increases or decreases in the scope of services.

The petition asserted that DSS failed to regularly review and adjust rates, and instead based its decisions on whether to grant requests for increases on “irrelevant substantive factors” — for example, that the state budget doesn’t allow for a rate increase or that the FQHC isn’t in need of one.

The budget agreement reached last week also clarifies the process by which the health centers can apply for Medicaid reimbursement rate increases if the “type, intensity, duration or amount of services” provided to patients changes.

The state is still figuring out how the remainder of the funds to boost Medicaid reimbursement rates, which haven’t been broadly adjusted since 2007, will get divided up amongst other provider types, a spokesperson with the Department of Social Services said.