The bill mandates that the Health Care Authority in New Mexico conduct cost studies every three years for each type of health care provider that receives Medicaid reimbursement. These studies aim to determine the costs associated with providing health care services and will include recommendations for adequate reimbursement rates. The factors considered in these studies will include the costs of competitive compensation for health care providers and adjustments for inflation and rising wages.

Additionally, when the Health Care Authority submits its budget request to the legislature, it must include the most recent cost study for each type of Medicaid-reimbursed health care provider. The bill allows for flexibility in the timing of these studies, stating that the authority is not required to conduct studies for all providers in the same year, as long as each provider is studied at least once every three years. The bill also defines "Medicaid" as the federal-state program administered by the authority under specific titles of the federal Social Security Act.