The proposed bill, Substitute Bill No. 1358, aims to ensure equitable compensation for nonprofit human services providers contracted by the state. It defines "nonprofit human services provider" and "state agency," and mandates that on July 1st of each year, state agencies must increase rates for recurring contracts by the percentage increase in the consumer price index for urban consumers in the northeast region from the previous year. Importantly, if the consumer price index decreases, state agencies are prohibited from reducing the rates for these providers. Additionally, the Commissioner of Social Services is required to adjust Medicaid rates for these providers in accordance with the rate increases established for state agency contracts, unless restricted by federal law.

Furthermore, the bill requires the Secretary of the Office of Policy and Management to submit a report by January 1, 2026, and every three years thereafter, 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 consumer price index. The bill introduces new legal language to establish these provisions and does not delete any existing legal language.