Senator McMath, sponsor of Senate Bill 96, told the House Committee on Appropriations the bill "establishes Medicaid reimbursement rates for certain behavioral health services," addressing a gap in coverage for outpatient services in the Medicaid fee schedule.

Sponsor testimony and proponents described pilot data from an intensive outpatient (IOP) pilot: "it showed an 84% reduction in inpatient admissions. It showed a 58% reduction in emergency room visits, and it showed the state saving 600 or $700,000... in just a short, 6 month period," Nick Waltz of the PCAR Group said in committee when summarizing prior pilot results. Waltz and others asked the committee to target the first phase to partial hospitalization programs (PHP) at freestanding psychiatric hospitals to manage fiscal exposure.

Members debated rates and fiscal impact. The June 8 fiscal note read into the record reported a projected $13,300,000 increase in Medicaid expenditures in fiscal year 2026 when both PHP and IOP were included, with roughly $3,900,000 in state funds and about $9,000,000 in federal funds. Committee members and sponsors said removing intensive outpatient services from the bill would reduce that estimate; proponents offered a narrower, more manageable fiscal exposure when limited to PHP services.

The committee adopted amendments that removed IOP coverage and clarified implementation would be "subject to appropriation." Representative Barrault offered an amendment removing intensive outpatient services; the amendment was adopted. Representative Marcelles then moved to report the bill favorable as amended, and "seeing no objection," the committee reported Senate Bill 96 favorable as amended.

Sponsor and proponents said partial hospitalization programs are intended to provide a step‑down option so patients discharged from inpatient settings have additional care and are less likely to return to emergency departments. Senator McMath said the department would reimburse at 100% of Medicare rates for the added service and that the fiscal estimate for the narrowed bill was about $3,900,000. Committee members requested fiscal notes and data from the Department of Health and signaled they expect follow‑up monitoring of utilization and savings as the program is implemented and funded.