Louisiana will raise Medicaid rates for home- and community-based services for people with intellectual and developmental disabilities by about 3% on Oct. 1, 2026. The state will also raise the direct support professional wage floor by 3%, to $9.27 an hour.
The Louisiana Department of Health announced the change in an Aug. 20, 2026 memo from Bernard Brown, assistant secretary of its Office of Intellectual and Developmental Disability Supports, to providers, support coordination agencies, local governing entities, participants and families. The Center Square first reported the memo on Aug. 27.
What the memo says
The memo calls the change a partial rate increase for the services identified for increase in the state's HCBS rate study. Lawmakers paid for it in HB 1, the state budget bill from the 2026 session.
The department chose what it called Option 1: an increase of about 3% across all affected services. It picked that option after a Rate Study Mini-Summit on July 17, 2026, and a follow-up survey in which most respondents supported it. Updated rate sheets will be posted in the Medicaid manual, and the office said it will send them to providers before Oct. 1.
The wage floor is changing by rule. The memo says the department will be "amending rule to increase the DSP wage floor by 3% to $9.27." It does not give a separate effective date for the new floor, so providers should watch for the rule notice.
What the state's rate study found
The rate study behind the decision was done by the actuarial firm Milliman. Its report, "SFY 2027 HCBS Payment Rate Study," is dated Jan. 16, 2026, and was posted by the department on Feb. 11. It covers the developmental disability waivers (Children's Choice, New Opportunities, Residential Options and Supports) and the department's aging and adult programs.
Milliman estimated that paying its modeled rates would raise overall HCBS spending by 14.2%, from about $1.160 billion to $1.325 billion a year, or about $165.0 million. For the developmental disability programs alone, spending would rise from $711.4 million to $813.7 million, an increase of $102.3 million, or 14.4%.
For the frontline worker wage, Milliman used $11.48 an hour: the Bureau of Labor Statistics median wage for personal care aides and similar direct care workers trended forward to December 2026. Providers in the study's workgroup reported paying an average of $11.45.
The report says Milliman was "not advocating for, recommending, or endorsing" any particular rate approach. Final decisions were left to the department.
How the 3% compares
A 3% increase covers a small share of the gap the study measured. On the developmental disability side, the modeled rates were about 14.4% above current rates. The new $9.27 wage floor sits more than $2 below the $11.48 the study used as the typical frontline wage.
The $9.27 figure is a legal minimum, not a typical wage. With providers in the study's workgroup reporting an average of $11.45, many already pay above the current $9 floor. What the floor sets is the lowest pay allowed under the rule.
Figures that differ from early reports
Some early coverage, including The Center Square's, gave slightly different study figures: $710.4 million to $813.7 million, a $103.4 million difference, and an overall gap of nearly $167 million, or 14.4%. The figures above come from the Milliman report itself. Early coverage also called $11.48 a minimum DSP wage. In the report, it is the modeled median wage, not a floor.
Why this matters for providers and DSPs
Agencies should check the updated rate sheets before Oct. 1 and budget for about 3% more on the affected services. They should also watch for the rule that sets the $9.27 floor, which is where the legal pay minimum will actually change.
For DSPs, the raise in the floor is 27 cents an hour. The state-commissioned study gives providers, families and advocates a documented benchmark for the next budget session: modeled rates about 14% above today's, built on an $11.48 frontline wage.