Substitute Senate Bill No. 1358, now 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. The bill defines "nonprofit human services provider" and "state agency," and mandates that state agencies increase rates for recurring contracts 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, rates for these providers will not be reduced. Additionally, the Commissioner of Social Services is required to adjust Medicaid rates for these providers in accordance with the CPI increases, unless restricted by federal Medicaid law.

Furthermore, the bill requires the Secretary of the Office of Policy and Management to submit a report every three years, starting January 1, 2026, to the relevant legislative committees. This report will detail state agency contracts with nonprofit human services providers and outline any necessary appropriations to ensure that future contract rates reflect CPI increases. The bill does not include any deletions from current law but introduces new provisions to enhance financial stability for nonprofit providers serving vulnerable populations.