Youngkin’s Final Budget – with a Surprise or Two!

December 17, 2025

The final budgets are out and there are a couple of surprises and a few landmines; first we will consider the “caboose” budget — that is what the Governor is proposing to change in the current budget. 

• Most notably, he is proposing to delay the implementation of the “BH Redesign” from July 1, 2026 to January 1, 2027.  While we are pleased that the Governor has recognized that the Commonwealth is not ready for the proposed disruption to the system, we feel pretty strongly that a six month “kick the can down the road” is insufficient.  However, this gives us the starting point for a redraft of the requested amendment.

In Youngkin’s “new” biennial budget there are several items of note:

• The rate increase as proposed by the recent rate study for Community Coaching, Community Engagement, Companion Care, Independent Living, In-Home, Therapeutic Consultation and Workplace Assistance is included and funds are appropriated [Item 291 JJJJJ].  The increase appears to be limited to the services listed above and does not include personal care, respite, or nursing services which are used in Waivers other than the DD Waivers.  So “compliance” with the intent of the permanent injunction is limited.   The General Assembly will have several choices, all of them fairly expensive.
•  Mobile Crisis will be revised to be limited to 4 hours per incident [Item 291 KKKKK] and only for providers contracted with CSBs (it is not clear how that may compare with having an MOU with the “Hub”). 
• DMAS will also have the authority to request from CMS permission to eliminate the “Community Stabilization Service” entirely by July 1, 2026 [Item 291 LLLLL] and to seek Federal Authority to implement a 56 hour per week limit on personal care/assistance services under the CL and FIS DD Waivers to mirror the “soft cap” currently in place in the CCC+ Waiver [Item 291 MMMMM].
• Additionally, DMAS will have the authority to seek Federal Authority to eliminate the live-in caregiver exemption from the EVV requirements [Item 291 NNNNN].  I’ll need to think about that one a bit!
• Lastly, for our purposes, in the DMAS section, they will have the authority to seek Federal Authority to eliminate inflation adjustments in FY 2027 and FY 2028 for hospital rates, free standing psychiatric facilities, DSH payments, nursing facilities and any other provider rates and they shall exclude the value of the withheld adjustments from future adjustments and rebasings. [Item 291 PPPPP]. 
• In Grants to Localities (which is where funds for other community services are posted) there appears to be minimal changes in funding.