Senate Bill No. 1547 establishes a framework for annual inflationary increases in payment rates for nonprofit human services providers that contract with the state. The bill defines "nonprofit human services provider" to include organizations that offer services for individuals with physical, intellectual, or developmental disabilities, as well as behavioral health services. It mandates that state agencies increase salary or payment rates for employees of these providers by July 1 each year, based on the percentage increase in the consumer price index (CPI) for urban wage earners and clerical workers from the previous calendar year. Additionally, the Commissioner of Social Services is required to adjust Medicaid rates for these providers in accordance with the same CPI increase, unless restricted by federal law.

Furthermore, the bill requires the Secretary of the Office of Policy and Management to submit a report every two years, starting January 1, 2026, detailing the appropriations necessary to ensure that future contracts reflect these mandated increases. The bill is expected to incur significant costs to the state, estimated at approximately $60 million in fiscal years 2026 and 2027, with a corresponding increase in federal grants revenue of about $17.2 million. The ongoing fiscal impact is anticipated to continue into future years, subject to inflation.