LeadingAge PA sent a letter to Governor Josh Shapiro on January 20, 2026, requesting a floor of 0.84 for the Budget Adjustment Factor (BAF). Initially designed as a temporary budget tool, the BAF has transformed into a structural mechanism that consistently keeps Medicaid reimbursement rates below sustainable levels. Currently sitting at 0.80, the BAF is reducing payments to providers by 20% compared to what their full rate should be under the state's case-mix methodology. Establishing a 0.84 floor, which would require approximately $274 million (annualized) in state funding, would help restore some predictability to the rate-setting process and ensure that nursing homes do not face further reductions that could threaten residents' access to care. 

We need your help urging the Governor to support our proposal as the FY 2026-2027 state budget negotiations get underway, which is a necessary step to avoid further erosion of the long-term care infrastructure that thousands of Pennsylvanians rely on. 

We have drafted a template letter you can personalize with real-life examples to illustrate why this is critical for providers and the individuals you serve. 

IMPORTANT: Under the “Message Body” field of the “Compose Your Message” box found on this page, please insert your specific examples demonstrating the need for this proposal, such as: 

• Impacts of fluctuating Medicaid reimbursement rates on your community’s ability to budget appropriately and care for older adults
• The gap between the costs of care and your Medicaid reimbursement rate

If you have any questions, please email govaffairs@leadingagepa.org. Thank you for speaking up to protect and strengthen aging services in PA!