Panel reduces EHR funding for Montana State Hospital after contract delays

The House appropriations subcommittee on Health & Human Services voted to reduce the Montana Department of Public Health and Human Services' (DPHHS) planned electronic health record (EHR) appropriation for the Montana State Hospital after the agency reported contract and timeline delays.

The committee passed Decision Package DP 09/1933 on a roll call vote after DPHHS told members it does not expect the EHR system to be operational in the upcoming biennium. Vice Chair Lance moved the motion to adopt the agency's revised request to remove the EHR funding originally included in maintenance and operations. Doctor. Pollet and Mr. Hannan explained the decision followed late-stage negotiations with a vendor that made implementation in the 2026–27 biennium infeasible. Vice Chair Lance's motion passed on a committee vote (eight ayes, according to the roll call recorded during the meeting).

Committee members framed the vote as a timing and contracting issue rather than a rejection of EHR as a priority. "This is a reduction in the budget specifically for electronic health records for Montana State Hospital," one member summarized after agency staff said negotiations during the holiday season pushed the schedule beyond the next biennium. Senator Pope and other members urged quick follow-up to resume the procurement process or reinitiate work as soon as an executable contract could be negotiated.

The discussion highlighted patient-safety and operational concerns at the hospital. Several lawmakers noted the hospital still documents care largely on paper, which complicates clinical coordination, regulatory oversight and claims processing. Representative Mercer and others said they would prefer the state move forward with modern records systems as an investment with programmatic returns, but they accepted the agency's timetable constraints.

DPHHS officials described the delay as outside the department's control and said they may need to restart procurement steps or renegotiate terms; the department indicated it will pursue the EHR work again but could not commit to completion within the current biennium. Committee members asked staff about options for the agency to seek supplemental funding if the EHR work needs to be restarted mid-session.

The committee also voted on a related maintenance-and-operations decision package (DP 9,000) that funds systems maintenance across multiple DPHHS programs. That maintenance package remained under consideration and includes other IT upkeep requests; members acknowledged the state made recent large IT investments and that ongoing maintenance costs will be significant. Several members urged improved procurement transparency and legislative reporting on large IT contracts during the interim.

The committee's action removed the EHR amount from the upcoming biennial budget but left open the possibility that DPHHS will return with a budget amendment, supplemental request or a new procurement if conditions change.

The committee recorded the action as DP 09/1933 (reduction for EHR); the motion to adopt the agency's revised request carried on the record.