Senate subcommittee hears DMAS forecast, cost‑containment proposals including redeterminations and ABA limits

Acting Department of Medical Assistance Services director Jeff Leonardi told a Senate health and human‑services subcommittee that Virginia Medicaid now covers roughly 1,800,000 people and faces continuing budget pressure driven by an aging and higher‑need population. “It’s the cost of providing health care to 1,800,000 Virginians,” Leonardi said.

Leonardi framed three near‑term priorities: ensure program and workforce stability, implement requirements in HR 1 in coordination with CMS, and execute cost‑containment strategies that preserve necessary services while controlling growth. He told senators the Medicaid forecast shows 7–8% growth across the upcoming biennium and that the program is shifting toward more expensive beneficiaries — particularly older adults and individuals with disabilities.

Why it matters: the demographic and utilization trends that Leonardi described raise the Commonwealth’s near‑term Medicaid obligations even as overall enrollment has declined from a high of about 2.2 million during the public‑health emergency.

Key budget items and proposals

- Waiver slots and implementation costs: Leonardi said roughly $280,000,000 in general‑fund costs across the biennium reflect full implementation of previously authorized waiver slots (about 3,400 slots) that were phased in after the 2024 session. He said those slots will take time before individuals are fully engaged in services.

- HR 1 operational requirements: Leonardi said HR 1 requires faster redeterminations for certain groups and noted that moving expansion beneficiaries to every‑six‑month renewals will create operational costs and likely increase churn unless administrative systems and local supports are improved. He emphasized that many changes will also require CMS approval before they can be implemented.

- Provider and MCO levers: DMAS proposes several cost‑containment actions, including applying tighter efficiency expectations to MCO administrative spending and freezing some provider rates (hospitals, nursing facilities and psychiatric residential treatment) at current levels for the biennium.

- Service‑specific proposals: Leonardi described an adult dental annual cap of $2,000 (adults only), proposals to require additional justification or audits for some ABA services and to set a 20‑hour weekly soft cap on ABA hours, and proposed narrowing mobile‑crisis services from an 8‑hour to a 4‑hour model while sunsetting a community‑stabilization service that DMAS described as a bridge service.

- Single PBM and behavioral‑health redesign: Leonardi said the single‑PBM direction from last session will require administrative funding up front and further policy decisions; behavioral‑health redesign implementation was described as delayed by approximately six months to allow providers and DMAS to prepare.

Contested items and reactions

Senators pressed operational questions about how six‑month renewals and work/community engagement verification would be handled. Leonardi said VACMS will remain the eligibility determination system and that DMAS is planning a verification module intended to reduce local DSS workload; he acknowledged the change will likely increase churn and said additional local DSS funding for the extra workload was not included in the DSS budget.

Quote: “For every six months, the core thing we’re trying to do to minimize the burden on the locals… is that if you’re an expansion member and you don’t touch another benefit program… the coverage in your call center can do your renewal,” Leonardi said.

What happens next: Leonardi and staff told senators they will continue working with CMS and providers and will refine technical details, cost estimates and implementation timelines as session deliberations and committee budget amendments proceed.

Ending: The subcommittee moved to the next presentation after a period of questioning.