Substitute Senate Bill No. 1358, also known as Public Act No. 25-151, establishes a framework for annual inflationary rate increases for state-contracted nonprofit human services providers. Effective from July 1, 2027, state agencies are required to increase rates for recurring contracts with these providers by the percentage increase in the consumer price index (CPI) for all urban consumers in the northeast region from the previous calendar year. Importantly, if the CPI decreases, state agencies are prohibited from reducing the rates for these providers. Additionally, the Commissioner of Social Services must adjust Medicaid rates for these providers in accordance with the rate increases established for state agency contracts, unless restricted by federal Medicaid law.

The bill also mandates that the Secretary of the Office of Policy and Management submit a report every three years, starting January 1, 2026, to the relevant joint standing committees of the General Assembly. This report will detail state agency contracts with nonprofit human services providers and outline any necessary appropriations to ensure that future contract rates reflect increases in the CPI. The new legal language introduced in this bill includes definitions for "nonprofit human services provider" and "state agency," as well as the stipulations for rate adjustments and reporting requirements, while no deletions from current law are specified.