The bill establishes a new chapter in the General Laws titled "Medicaid Program Funding and Reallocation of Enrollment Savings." It mandates that any savings generated from enrollment-driven reductions in Medicaid expenditures, specifically those attributable to decreases in enrollment as reflected in the estimates from the Rhode Island caseload estimating conference, be retained within the Medicaid program. These savings are required to be exclusively reallocated to increase reimbursement rates for various Medicaid services, including hospital inpatient services, hospital outpatient services, physician services, and federally qualified health center services. The bill specifies that these funds must be additive to existing Medicaid reimbursement levels and cannot be used to supplant, replace, or offset existing appropriations, rate structures, or payment methodologies in effect as of June 30, 2026.

The executive office of health and human services is tasked with adjusting Medicaid fee-for-service reimbursement rates as necessary, amending managed care contracts, and implementing state-directed payments to ensure that rate increases are reflected in payments to providers, with a minimum provider pass-through rate of not less than ninety percent (90%) of each rate increase, to be implemented within one hundred eighty (180) days of the effective date of each rate adjustment.

Additionally, the executive office is required to submit an annual report to the General Assembly by October 31 of each year. This report must cover the calculation of enrollment-driven savings, provider rate adjustments by provider type and care setting, the total amount of federal financial participation generated by rate investments, the status of any required state plan amendments or federal approvals, and compliance by managed care organizations with the provider pass-through payment requirements.

The act is set to take effect on July 1, 2026.