Arkansas lawmakers on a key committee approved a measure that dramatically cuts Medicaid payments to assisted living operators.

Operators would see Medicaid rates cut by up to 22% if the measure becomes law. That’s enough to put many communities out of business, they claimed after the vote. In all, more than 1,200 Medicaid recipients who live in assisted living communities would be affected by Monday’s vote, according to state estimates.

The funding reduction is part of a larger effort to trim Medicaid outlays by $835 million by 2021. The cuts will give the state’s health department more flexibility in tailoring service allocations, said Mark White, a health department spokesman.

Arkansas now classifies assisted living residents in four tiers, with daily rates ranging from $70.89 to $85.35. Under the committee-approved proposal, the state would pay a uniform amount for all residents. In January, the rate would be $80.30. But it would drop to $71.61 in July and $62.89 in 2020, under current proposals.