Conference committee reviews Joint Fiscal Office materials for H.493, flags $50 million contingency and Medicaid reserve issues

Members of the conference committee on H.493, the FY26 state budget, met May 2 to review Joint Fiscal Office materials and agree a schedule for follow-up work as they prepare conference language.

Emily Byrne of the Joint Fiscal Office walked committee members through the packet of spreadsheets and reports that JFO provided for conference deliberations, including a “gray out” tracker for closed sections, the Senate and House bill crosswalks, one-time appropriation details, base changes, a cash-fund summary and a reserves overview.

The committee focused on three substantive fiscal items: a contingency list in the Senate construct totaling $50,000,000; the status and intended uses of the human services caseload reserve (including the portion set aside for incurred-but-not-reported Medicaid claims); and provider rate increases included in the budget drafts.

Byrne said JFO would update the materials as the committee makes decisions and would add a conference column to show how items are resolving between the House and Senate texts. "Right now, there is no gray on it," Byrne said of the gray-out tracker, noting the office will gray out sections as they are closed.

On the contingency list, the packet copies Senate language that would set aside $50,000,000: the first $5,000,000 to a communications and information technology special fund (described in the materials as the governor's request for a change in billing) and approximately $45,000,000 in an appropriation to the secretary of administration to be transferred by the eBoard if federal funds are reduced. The materials note the eBoard has authority to transfer up to 2% of appropriations in a fiscal year.

The committee reviewed an overview of the general-fund reserves. JFO staff described the human services caseload reserve as funding that can be used for Medicaid-related utilization increases and for the calculation referred to in the briefing as the incurred-but-not-reported (INBR) Medicaid expense — the lag between services delivered and claims billed to the state. JFO indicated that FY26 changes reflect increased utilization in some areas that reduced that reserve.

Members also reviewed provider rate increases in the proposals. The materials identify a 2% general provider rate increase and other, targeted increases (including increases for federally qualified health centers, evaluation and management coding adjustments, home- and community-based services, and a 5% increase for infant and toddler services). The packet notes some increases are tied to special funds (for example, infant and toddler funding from the childcare special fund) and raised questions about timing if federal funds are expected to begin on Nov. 1.

JFO staff pointed committee members to a mapping document (referred to in the materials as Grady's map) that shows where amendments from the Budget Adjustment Act and other bills were integrated into H.493 (some items were left in section F, moved to other bills, or removed). The JFO briefing also includes a ‘‘Christmas tree’’ side-by-side document, a technical letter from Finance and Management, and a letter from Secretary Clark to the Senate Appropriations Committee.

No formal motions or votes were taken at the meeting. Committee members agreed a series of follow-up meetings to complete conference work: a Monday afternoon session (targeted 3:30 p.m.), sessions on Tuesday (morning and mid-afternoon) and Wednesday (including an 8:30 a.m. start and a midday check-in), with a planned Thursday morning meeting to complete remaining items and sign conference documents if work is finished. JFO staff agreed to produce updated worksheets and the conference column reflecting committee decisions.

The committee signaled that timing and availability of federal funds could affect how some rate increases are implemented and whether certain funds would be available in FY26; JFO flagged that if rate increases are not fully funded in the current year they can create upward pressure in subsequent fiscal years because those increases would be annualized in later budgets.

Committee members and staff repeatedly emphasized logistics: JFO will update the spreadsheets as deliberations proceed, and staff will circulate meeting notices and room assignments ahead of the scheduled sessions.

The meeting closed without final votes; committee members left with JFO materials to review over the weekend and scheduled the next round of conference sessions.