Lawmakers probe FY2026 AHS budget changes including provider rate increases and cuts to recovery campus funding

Members of the appropriations committee and Agency of Human Services (AHS) staff spent an extended April 9 session reviewing FY2026 changes to AHS appropriations, focusing on provider rate increases embedded in the Global Commitment, cuts the House made to recovery-campus and aftercare funding, and several open follow-ups about rural and community health funding.

Committee members flagged the mixture of provider rate changes that appear in multiple budget sections under the Global Commitment. Staff described two main groups of rate adjustments: one set tied to a 2023 rate study affecting “choice of care” sections and another set covering non–home-health agencies (for example, federally required increases for federally qualified health centers and rural health clinics). Committee members asked staff to confirm section-by-section who was included in the increases and whether some provider types were left out. AHS staff acknowledged the increases are shown across multiple 300-series sections of the budget and said they would provide clarifications after the meeting.

Why it matters: The Global Commitment is the mechanism that mixes state and federal Medicaid-related funding across many programs; provider rate changes embedded there affect how much money flows to mental-health providers, developmental services, rural clinics and others statewide.

Discussion highlights and outstanding questions

- Provider rate increases: Committee members asked for a clearer dollar and section-level accounting of increases. One staff member described an initial gross-dollar presentation that shows a split across program sections (for example, a figure shown as 10.7 in one line and 24.4 in another when grossed up to include federal and general-fund shares). Staff said the total gross increase reflects both state and federal shares and agreed to post the detailed calculation.

- Rural clinics and federally required increases: AHS staff called out that federally qualified health centers (FQHCs) and rural health clinics (RHCs) are included in the PHC line and said the gross dollar total includes required increases for both. Staff did not have an immediate count of how many RHCs would be affected and agreed to follow up with a precise tally.

- Recovery campus and related items: The House removed funding for a proposed recovery campus (commonly discussed as a $1.5 million line in the materials) and for aftercare navigators. Committee members asked AHS for language to justify the campus funding and for detail on what the House action removes. Staff said reengagement beds remained funded in the House proposal but the campus line and navigator funding were not; staff will supply proposed language and further clarification after the meeting.

- Howard Center outreach vs. mobile crisis and embedded clinicians: Members pressed staff to explain differences between ongoing outreach/outreach worker programs (described as regular engagement with clients) and mobile crisis response (intended for immediate crisis response). The committee noted the House restored funding that preserves outreach workers while not eliminating mobile crisis, and asked the Department of Mental Health (DMH) and the Howard Center to provide more detail on service overlap and program roles.

- Substance-use and mental-health lines: Staff said the substance-use residential provider rate increase was intended specifically for residential treatment providers and that some mental-health clinician and embedded-clinician items had differing base and one-time treatment between the governor’s recommendation and the House action; staff will reconcile the numbers.

- Secure residential youth facility: AHS fiscal staff (Rashana Hagen) presented a projection that the secure residential youth program could face a FY2027 shortfall of roughly $1.7 million under current assumptions because of carry-forward and temporary facility costs. The projection was described as provisional and subject to change; staff agreed to provide supporting detail.

- Tobacco-settlement funds and pregnant-parent programs: Committee members discussed a House request to direct about $500,000 of tobacco settlement dollars toward parent–child centers and pregnancy-specific programming. AHS staff said they would consult with Department of Health and Department for Children and Families on fund eligibility and confirm whether tobacco-settlement funds are an appropriate source for the proposed parent–child initiative.

- Opioid settlement and aftercare/navigation funding: Members debated whether removed aftercare-navigator funding could be replaced by opioid-settlement dollars; several members cautioned that routing settlement funds outside the settlement-advisory process could disrupt that governance structure and said they preferred to preserve the advisory process.

Decisions and committee directions

- Several lines were left open for follow-up: section-level calculations of rate increases; precise counts of affected rural clinics; statutory or budget language to justify recovery-campus funding; reconciliation of embedded clinician and pediatric clinician funding; and detailed support for the secure-residential shortfall projection.

- The committee agreed to ask DMH and the Howard Center to provide written descriptions of how outreach workers, mobile crisis teams and embedded clinicians differ in practice and in measurable outputs.

- Several items the committee closed during the session (minor housekeeping lines), while the substantive AHS Global Commitment and provider-rate items remained open pending the follow-ups above.

Context and next steps

Committee members stressed that many of these changes are “mixed” by design inside the Global Commitment and therefore appear across multiple budget lines; staff committed to producing a clean, section-by-section reconciliation that the committee can use in a conference or budget-adjustment context. Members repeated that if the committee wants to restore or create ongoing base funding for program lines they need clearer program descriptions, counts of providers affected and the precise dollars embedded in each section. Staff agreed to return the requested supporting material before the next meeting.

Ending: The panel kept the most consequential AHS items open for additional documentation and asked staff to provide line-by-line calculations and program-language clarifications; several smaller budget lines were closed during the session.

(Reporting note: this article is limited to discussion recorded in the April 9 appropriations transcript. It does not include subsequent filings or amendments.)