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State: Magellan has corrected initial payment problems after Idaho behavioral-health managed-care rollout
Summary
Department officials told JFAC that payment delays tied to the July 2024 behavioral-health managed-care rollout produced provider complaints but that the contractor has returned to compliance; the department has imposed liquidated damages and continues monitoring.
Boise — Department of Health and Welfare officials told the Joint Finance-Appropriations Committee on Feb. 26 that the contractor for the Idaho Behavioral Health Plan encountered implementation problems after a July 1, 2024 go-live but has taken steps to resolve provider payment delays.
“Since we launched this contract in July of 2024 ... there were some challenges initially, with provider payments,” Juliette Sharon, deputy director who manages Medicaid, said. Sharon described administrative and enrollment hurdles as the contractor, Magellan, brought providers into a new electronic payment and claims environment and said the department has held the contractor accountable.
What the department told the committee
Sharon said the scope of the new contract was “significantly larger than the historical IBHP contract,” incorporating services previously paid fee-for-service and new interfaces for utilization and enrollment data. She said additional configuration work was required to ensure the department could meet federal reporting and oversight obligations.
On provider payments, Sharon said the department has seen improvement and that Magellan is “back in compliance with timeliness requirements.” She told the committee that the department has imposed more than $100,000 in liquidated damages and placed Magellan on corrective action plans; the department continues to review monthly timeliness reports and denials data.
An associated supplemental request
Analysts earlier described a supplemental to pay for system configuration and onboarding costs tied to the behavioral-health contract. Alex Williamson, the legislative analyst, told the committee that the department’s recent requests include one-time funding to complete system changes and testing required to onboard the new vendor for the Idaho Behavioral Health Plan.
Questions from members and department response
Several legislators pressed for assurance that payment problems would not persist. Sharon said Magellan had resolved specific issues raised earlier in the rollout — including address and electronic funds-transfer setup for providers and federally qualified health center payment problems — and that the department’s oversight remains active.
“Magellan addressed those very, very quickly in partnership with our team,” Sharon said, adding the department took multiple corrective steps and monitors performance metrics.
Ending
Department leaders told the committee they will continue monthly oversight and that they remain prepared to report further to the Legislature if payment timeliness or denials do not remain within contract standards.
