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Designated agencies ask Legislature for $13.95 million to shore up behavioral health services
Summary
Amy Johnson of Vermont Care Partners asked the committee for a $13,950,000 general-fund increase—about a 6.2% Medicaid-rate boost—to support 16 designated agencies, citing workforce shortages, low cash reserves and statutory rate-adjustment language.
Amy Johnson, executive with Vermont Care Partners, told the House Human Services Committee that the association is requesting $13,950,000 in general funds for FY26 to support 16 designated agencies and to provide a 6.2% increase to Medicaid rates for behavioral health services.
Johnson said the governor’s proposed budget contains no increase for the agencies, and that level funding is effectively a cut because inflation and wage pressures have continued. She said the association’s CFOs modeled wage and fringe increases, health insurance costs, other operating costs and inflation to arrive at the $13.95 million figure. The request, she said, seeks to preserve essential services provided on the state’s behalf.
Johnson told the committee that payment-rate review and adjustment authority is codified in statute, but that in practice rate increases often come from legislative action rather than the executive budget. She said the agencies’ aggregate days of cash on hand declined and that some agencies have drawn on reserves, taken lines of credit or otherwise strained balance sheets. At the aggregate level Johnson presented an estimate of about 60.3 days of cash on hand in fiscal 2024.
Johnson said workforce pressures remain acute and that wage and benefit competitiveness drive recruitment and retention. She said the agencies’ analysis showed vacancy and turnover improvements when prior rate increases were approved but that more investment is required to “turn the curve” over the long term. She referenced outside analysis showing system-level savings from community-based services and said underinvestment increases pressure on higher-cost services such as emergency departments and inpatient care.
“Once we kind of crunch all those numbers, this is what we need to keep the lights on,” Johnson said.
Committee members asked about whether agencies offer state health-insurance plans, about fundraising capacity among agencies, and about how the proposed increase interacts with other one-time or continuing funding streams. Johnson said some agencies are self-funded or use captive arrangements for benefits and that fundraising capacity varies across the network. She also noted that the requested figure excludes certain other funding streams and that the calculation did not include recent one-time or transitional funds for particular programs.
Johnson asked the committee to consider the statewide system impact of continued level funding and to weigh the effects on staffing, service continuity and downstream costs.
