HHS outlines $9.4M in COVID behavioral‑health awards ending; $6.2M unspent, contracts re‑prioritized

Bismarck — Pam Segnus, the department’s executive director for behavioral health, briefed the appropriations subcommittee on federal COVID‑era grants that support behavioral health and said roughly $9.4 million in awards tied to the federal pandemic response are scheduled to expire by Sept. 30, 2025.

Segnus told lawmakers the department had drawn approximately $3.1 million of the total awards and had about $6.2 million remaining when the grants were slated to terminate. The department categorized prior draws and obligations as: 33% expended (reimbursements and direct purchases), 23% obligated through external contracts, and the remainder either intentionally turned back or canceled.

Segnus presented a breakdown of contracts affected and said some contracts were in the procurement pipeline (entered but not signed) and were therefore canceled without finalized agreements, while others were terminated after formal contract execution. She said the department prioritized continuity for services where termination would abruptly stop care — for example, withdrawal‑management providers that operate 24‑7 social detox services.

“The obligated in blue… are obligated and contract canceled or terminated, and that was 43% of this total pie,” Segnus said in the hearing’s slide‑by‑slide discussion. She told the committee the department has found replacement funding for $344,000 of obligated contracts and is working with Medicaid and other federal partners to minimize service disruptions.

Examples and use of funds

Segnus identified canceled or unfinalized contracts that included workforce‑recruitment tools (a virtual‑reality recruiter demonstration) and a contract for mental‑health support to staff who respond to critical incidents. She said one small $250,000 award was intentionally turned back because it was specific to PPE and items the state did not need.

She also read a list of continuing contracts through Sept. 30, 2025, and said sustainability plans are in place for services that can be transitioned to billable codes or other federal funding streams. “We are working with providers to make sure that they know how to bill for services. Medicaid has reached out and said, ‘what are some things we can do to assist to make sure that when something’s billable that that’s happening?’” Segnus told the committee.

Lawmakers’ questions and department response

Committee members asked what “canceled but in progress” means; Segnus explained those were agreements that had been scoped and entered into the contracting pipeline but not fully executed. Senators also asked whether terminating contracts creates obligations or penalties; Segnus said contracts generally include appropriation or funding contingency language and that unresolved invoices for services performed remain a priority for federal drawdown attempts.

Senators asked about the mental‑health support contract for staff, described in the hearing as payment for specialized support to behavioral health clinicians who respond to traumatic incidents; Segnus said the department is exploring other federal block‑grant sources and re‑prioritizing existing funds to preserve critical workforce supports.

Next steps

Segnus said the department is reviewing other federal and state sources (including the Substance Abuse Prevention and Treatment Block Grant and opioid settlement funds) to sustain prioritized services and will provide the committee additional detail on which services will continue, transition to Medicare/Medicaid billing, or end when federal COVID funds expire.