Budget includes $8.6M for federal conflict‑free case management; committee hears staffing, contractor and geographic requirements

The governor’s FY26 budget includes an $8.6 million proposal to implement federally required conflict‑free case management and related payment‑reform work across developmental and adult services, department officials told the committee.

That line item “is the mandatory federal conflict free case management” included in the Agency of Human Services budget, the department said. The $8.6 million request was described as a global commitment to fund case management conversion, development of broker services, supports for self-managed services, third‑party eligibility contracts and data and quality positions.

Committee members asked how the money would split between new state positions and contractor costs. Department and finance staff said the proposal included five new positions (three in adult services, two in developmental services) and an estimated contractor staff line. “So the contractor staff estimated at this point is, but, 660,000, and the, position to the balance,” said Bill Kelly, a finance official, referring to the contractor estimate included in the request.

Officials also described geographic and performance expectations being built into contracts for new case management functions: staff must be able to reach individuals in their communities. “We are building into the scope of work for the contract that individual consent of their sleeves be within 60 miles or 60 minutes of the individual that they took. So they do need to have an in state presence,” department staff said, describing the intent to require a local capacity to meet with people where they live.

Why it matters: conflict‑free case management is a federal requirement for certain Home and Community‑Based Services programs and will change who conducts eligibility determinations and case management. Committee members said they want clarity on which functions will remain with area agencies and which will move to contracted brokers, how exceptions will be handled, and how the state will monitor continuity of care during the transition.

Department staff said some parts of the $8.6 million are for direct positions and some for contractor services; they described the budget as a ramp‑up that will be monitored and adjusted as implementation proceeds. The committee scheduled a deeper discussion of conflict‑free case management and payment reform at a follow‑up hearing.

Ending: The committee asked for more granular cost and program detail but did not take action; department staff committed to provide contract language and monitoring metrics to the committee for follow‑up review.