Health department proposes host‑home pilot, ICF moratorium and waiver changes in developmental‑disability budget

Tina (presenter name recorded; last name not specified), speaking for the Department of Health and Human Services’ Developmental Disabilities (DD) section, told the Senate Appropriations Committee that the DD budget request totals about $810.6 million and accounts for roughly 12.9% of the state's HHS budget. She presented program data, proposed policy changes and several budget items the department is seeking for the 2025‑27 biennium.

The department reported growth in demand for DD services: a 35.5% increase in referrals from 2021 to 2024, and a 10% growth in licensed providers. Tina said the intermediate care facility (ICF) licensed capacity is 451 beds while average monthly bed usage for July 2023–June 2024 was about 389 beds. The department supported a House amendment that would pause adding any new licensed ICF beds between July 1, 2025, and June 30, 2027, and described that as a planning step to “level set” capacity and explore repurposing open beds for short‑term crisis placements rather than expanding institutional capacity.

To fill gaps for youth with high needs, the department proposed a host‑home pilot for therapeutic, family‑style residences. The pilot would establish 20 host homes serving about 20 youth (birth through 21) with therapeutic supports; the department intends to use ARPA funds for a pilot procurement and asked for ongoing appropriations to operate the model if successful. The department said it is pursuing a procurement with a vendor known to provide therapeutic foster‑care services to implement the pilot.

The department also proposed several waiver and program changes: conversion of the outdated ICAP assessment to the SIS‑C (a strengths‑based support‑needs assessment), increased annual limits for waiver equipment and supplies (raised to $5,000) and an increase in the environmental modification cap to $40,000 per five years. Tina said those changes took effect in April 2024 and are intended to expand assistive technology and home modification options that help people remain in community settings.

Tina described the department’s outlier policy that allows enhanced staffing authorizations when an individual’s medical or behavioral needs exceed standard service authorizations. She presented a case study of a young man with complex needs who required dozens of placement attempts and outlier funding to stabilize—a use case the department said underlines the need for host homes and crisis options.

The presentation included an item the House added to HB1012: a one‑time general fund payment to the Anne Carlson Center for Health and Disabilities; the department said the House amount was intended to offset recent shortfalls but that the payment is one‑time rather than ongoing. Department fiscal staff confirmed that one‑time payments for prior services are not eligible for federal FMAP matches.

Committee members pressed department staff on eligibility definitions, how the department decides to add service options within existing waivers, and whether the state is adding ICF beds. Tina said the department plans to explore repurposing licensed beds for crisis placements but does not intend for the moratorium to remove existing licensed capacity from providers that intend to fill them.

Ending: The DD section asked the committee for follow‑up time to continue the discussion; the department offered to provide procurement documents and additional cost estimates for the host‑home pilot and for conversion to SIS‑C.