The Louisiana Department of Health released an August 20 memo notifying providers, participants and families that, beginning Oct. 1, Medicaid reimbursement rates for certain home‑ and community‑based services (HCBS) for people with intellectual, developmental or physical disabilities will rise by roughly 3 percent. The modest increase reflects the amount of funding that the 2026 state budget made available after lawmakers approved the appropriation.
Why the increase matters for families
For many Louisiana families, HCBS allow loved ones to receive care in their own homes rather than in institutional settings. By lifting rates from the current schedule, the state hopes to keep those services affordable and stable, especially as the cost of living continues to climb. The department also announced a 3% raise in the minimum wage floor for direct‑support professionals, moving the hourly minimum from $9.00 to $9.27. While still below the $11.48 per hour modeled in the department’s recent rate study, the increase is intended to improve workforce stability and retain qualified caregivers.
Study shows larger gap between current and modeled rates
In 2025 the department commissioned consulting firm Milliman to conduct a comprehensive rate study. Milliman’s model projected that, for fiscal year 2027, overall HCBS expenditures would need to rise about 14.2% to match the cost of providing services at a level comparable to national benchmarks. Under the modeled rates, total program payments would climb from roughly $1.16 billion to $1.33 billion – an increase of about $167 million (14.4%). For the segment overseen by the state’s Developmental Disabilities Office, payments would jump from $710.4 million to $813.7 million, a $103.4 million rise.
In‑home services accounted for about 95% of the projected increase, underscoring the importance of home‑based care for Louisiana’s disabled population. One example in the department’s fact sheet showed the modeled reimbursement for Individual and Family Support services climbing from $18.50 per hour to $21.20 per hour.
What the state chose to fund
The department said the 3% increase was selected after a July 17 stakeholder meeting and a follow‑up survey. A majority of respondents supported distributing the available funding as a uniform 3% boost across affected services rather than adopting the higher modeled rates. Updated reimbursement schedules will be released before the October 1 effective date.
Looking ahead
While the increase is a step forward, the study’s findings highlight a larger funding gap that will require additional legislative action if Louisiana wishes to fully align its HCBS rates with the modeled costs. Advocates and provider groups continue to press for higher wages and more robust support for direct‑support professionals, arguing that better compensation is essential for retaining a skilled workforce and ensuring quality care for the state’s most vulnerable citizens.
For now, families and providers can expect the modest 3% raise to take effect this fall, offering a small but meaningful relief as the state works toward longer‑term solutions.
Original reporting: KTBS 3 (Shreveport) — read the source article.
