(The Center Square) – Louisiana will increase Medicaid reimbursement rates for certain home- and community-based disability services by about 3% beginning Oct. 1, a partial increase after a state-commissioned study estimated substantially more money would be needed to bring rates in line with modeled costs.

The Louisiana Department of Health announced the increase in an Aug. 20 memo to providers, participants and families. Funding for the increases was appropriated by lawmakers in the state budget approved during the 2026 legislative session.

The increases apply to affected Home and Community-Based Services, or HCBS, administered through the department’s Office of Intellectual and Developmental Disability Supports.

The department will also move to increase the minimum wage floor for direct support professionals by 3%, from $9 an hour to $9.27.

The changes represent only a portion of the increases modeled in a rate study commissioned by the department and conducted by consulting firm Milliman.

The study examined Medicaid reimbursement rates for services that allow people with intellectual and developmental disabilities, physical disabilities and age-related needs to receive care in their homes and communities rather than institutional settings.

Milliman estimated its modeled rates for fiscal 2027 would increase overall HCBS expenditures by about 14.2% compared with existing fee schedule rates.

A department fact sheet estimated payments across the programs at about $1.16 billion under existing rates and approximately $1.33 billion under the modeled rates, an increase of nearly $167 million, or 14.4%.

For programs overseen by the state’s developmental disabilities office, estimated payments would increase from about $710.4 million to $813.7 million under the model, a difference of approximately $103.4 million.

In-home services accounted for about 95% of the projected increase, according to the department.

The study also modeled higher compensation for workers than the state is implementing this fall. Its rate assumptions included a minimum direct support professional wage of $11.48 an hour. The new wage floor will instead be $9.27.

One example included in the state’s fact sheet showed the modeled reimbursement rate for Individual and Family Support services increasing from $18.50 an hour to $21.20.

The study did not recommend that Louisiana adopt the modeled rates. Milliman said the calculations were intended to help the department evaluate funding levels and inform decisions about reimbursement rates, with final policy decisions left to the state.

LDH commissioned the study in 2025 after receiving input from lawmakers, provider groups and advocacy organizations. The review included historical rates, state and national data, provider cost reports and feedback from providers and other stakeholders.

The department said the goal was to establish a more objective framework for setting rates while examining the cost of providing services and addressing wages and workforce stability.

The 3% increase was selected following a July 17 stakeholder meeting and survey. LDH said a majority of respondents supported the option that distributed the available funding as an approximately 3% increase across affected services.

Updated reimbursement schedules will be released before the increases take effect, according to the department.