JBC advances one‑year extension of child‑welfare residential treatment carve‑out; committee sets development and implementation dates

The Joint Budget Committee voted to introduce a bill delaying the capitation transition for child‑welfare residential treatment for one year and required the Department to develop and implement transition policies on an accelerated timeline.

Emily Pope, JBC staff, said the draft would push back the historic plan to move child‑welfare residential treatment under behavioral‑health capitation for one year and recommended an RFI to collect detailed information on utilization, medical‑necessity determinations, discharge and aftercare planning, and financing under the change. “Section 1 is the section that's specifically exempting child welfare from managed care for 1 additional year,” Pope said.

Committee members expressed concern that the Department and providers must have concrete policies and placements in place before the carve‑out ends. Senator Kirk Meyer (as recorded in the transcript) said: “I just don't know where these children and these youth go,” stressing that counties and providers need dates and plans to avoid displacing youth without placements. After discussion, committee staff agreed to require the Department to have development work completed by Dec. 1, 2025, and to implement the policies by July 1, 2026. The statutory repeal of the carve‑out remains set for July 1, 2027, giving the 2027 session the opportunity to reassess the repeal if implementation concerns persist.

The committee also approved continued use of a request for information (RFI) in addition to statutory language so the committee can collect operational detail and adjust oversight without further statutory reporting mandates. Committee members voted 6‑0 to introduce the bill as amended by the timing decisions. The committee directed staff to circulate bill language reflecting a development deadline of Dec. 1, 2025, an implementation deadline of July 1, 2026, and a repeal date of July 1, 2027.

What the bill does and why it matters

The draft delays the transfer of child‑welfare residential treatment from fee‑for‑service (or existing carve‑out status) into managed‑care capitation for one additional year. The committee emphasized that transition policies (case‑planning, discharge and step‑down placements) must be developed and in place in advance so counties and providers are not left without placement options. Staff estimated approximately $5,000,000 currently associated with the carve‑out in the budget, though staff cautioned most of that funding flows through child‑welfare services broadly rather than exclusively toward residential placements.

Next steps

Staff will prepare a revised draft reflecting the new dates and the RFI; sponsors and staff said the bill will start in the Senate and carry through the post‑budget package. The committee recorded a unanimous vote (6‑0) to introduce the bill with the amended timing.