JFAC approves Medicaid supplementals, ongoing hospital assessment and other FY2026 enhancements

The Joint Finance‑Appropriations Committee on an affirmative vote approved a package of fiscal year 2025 Medicaid supplementals and a separate set of fiscal year 2026 budget enhancements that together add federal, dedicated and general fund spending for the Division of Medicaid within the Department of Health and Welfare.

Alex Williamson, budget and policy analyst with Legislative Services, told the committee the FY2025 supplemental bundle includes several items required to meet federal and contractual obligations and to cover updated forecasts. "Line 7 is the Medicaid updated forecast... they are asking for an additional $113,800,000 to meet those entitlement program costs," Williamson said. She also described supplemental requests for a managed care external quality review, implementation costs related to the Idaho Behavioral Health Plan, a capitation‑rate adjustment for that same behavioral health plan, and an increased hospital assessment to access additional federal funds.

Why it matters: The votes increase short‑term and ongoing Medicaid appropriations and authorize the state to transmit additional hospital assessment funds to draw down federal matching dollars. Committee members repeatedly framed the actions as paying accrued bills and setting up ongoing funding for federally required work and multi‑year IT and actuarial support.

Most important facts: For FY2025 the committee approved one‑time supplementals that include a $1,350,000 appropriation for the managed care external quality review, $695,500 for Idaho Behavioral Health Plan system configuration costs, $113,849,300 for an updated Medicaid forecast, $108,821,400 to cover capitation‑rate increases for the behavioral health plan, and $190,510,600 in hospital assessment funds. The reported total for that supplemental package was $415,226,800, funded by a mix of general, dedicated and federal dollars. Senator Wintrow moved the FY2025 supplemental motion and Representative Handy seconded.

For FY2026 the committee approved ongoing spending described as enhancements: continuing the hospital assessment fund appropriation, adding funds for additional federally required CAHPS surveys, an adult developmental disability (DD) resource allocation tool related to the KW litigation, an actuary contract amendment, continued funding for the managed care external quality review, state share for the MMIS (Medicaid Management Information System) procurement, and a population forecast adjustment to account for caseload, pricing and utilization changes. Representative Furness moved the FY2026 package; Senator Burkey seconded. The committee recorded totals for FY2026 enhancements of $70,141,900 from the general fund, $88,963,700 from dedicated funds and $515,087,000 from federal funds, a combined $674,192,600.

Discussion highlights and clarifications: Committee members asked about the nature of several items and received clarifications from Williamson and other legislators. Key clarifications in the hearing record include: - The managed care external quality review and additional CAHPS surveys are federal requirements tied to Medicaid participation. Williamson described the EQR as required whenever a state has managed care organizations. - The hospital assessment money is intended to be transmitted to a dedicated hospital assessment fund so the state can draw down additional federal funds under the upper payment limit calculation; Williamson described this as allowing hospitals to access federal matching funds and the state to return funds to hospitals accordingly. - The adult DD resource allocation request stems from a court settlement (identified in the hearing as the "KW" lawsuit) and would fund an assessment tool and related court‑ordered attorney fees. - The actuary contract amendment was described as necessary because the Division of Medicaid does not have in‑house actuaries and relies on external actuarial services for capitation‑rate development, forecasting and risk analysis. - The MMIS line represents the state share of an ongoing multi‑year IT replacement; committee members described funds as already set aside in a dedicated MMIS fund and being released as milestones are met. - Population forecast adjustments reflect expected changes in FMAP, caseload, utilization and provider pricing and were presented as an updated projection for FY2026; Williamson described this as an updated forecast that can produce reversions if overestimated or require future supplementals if underestimated.

Policy language and reporting: The committee also approved language attached to the budget that directs the Division of Medicaid to: explore a value‑based payment model for outpatient addiction treatment and report to JFAC by Jan. 15, 2026; align Medicaid contract periods with the state fiscal year and report progress by Jan. 15, 2026; and submit an annual report on emergency Medicaid clients served and expenditures no later than Sept. 15 following each fiscal year. That language passed by unanimous consent.

Concerns and contingent items: Several members cautioned that forecasts are inherently uncertain. Representative Furness and others urged continued legislative oversight of large policy changes and flagged that some savings included as a result of House Bill 345 are contingent on federal waivers and implementation. Senator Wintrow voiced concern that added reporting requirements were not paired with additional staff funding. Senator Cook and other members emphasized reliance on external actuaries and the practical limits of in‑house staffing.

Votes at a glance: - FY2025 Medicaid supplementals (one‑time): Motion moved by Senator Wintrow; seconded by Representative Handy. Key line items: $1,350,000 (managed care external quality review); $695,500 (Idaho Behavioral Health Plan system configuration); $113,849,300 (updated Medicaid forecast); $108,821,400 (behavioral health plan capitation rate increase); $190,510,600 (hospital assessment fund). Committee reported total: $415,226,800 (split across general, dedicated and federal funds as shown on record). Outcome: passed. Recorded votes reported: Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused; total ayes 13.

- FY2026 Medicaid enhancements (ongoing): Motion moved by Representative Furness; seconded by Senator Burkey. Key line items include ongoing hospital assessment funding, $67,600 for additional CAHPS surveys, $200,000 for the adult DD resource allocation model, $1,100,000 actuary contract amendment (split half general/half federal in the presentation), continued EQR funding, $117,200,400 for MMIS procurement (state share), and a population forecast adjustment (presented in the record around $376 million). Committee reported total: $674,192,600 ( $70,141,900 general; $88,963,700 dedicated; $515,087,000 federal). Outcome: passed. Recorded votes reported: Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused; total ayes 13.

What comes next: Both measures were recorded as "going forward as a bill with a new pass recommendation," meaning they will proceed through JFAC’s legislative process with the committee recommendation and the appended reporting and condition language. Several members urged expedited workgroup follow‑ups and additional oversight during implementation.

Ending: The committee adjourned and scheduled workgroup meetings to continue review of other agency budgets.