DAIL requests $8.6M to implement federally required conflict-free case management

Department officials told the House Appropriations Committee on May 20 that a centerpiece of the DAIL fiscal 2026 proposal is funding to implement mandatory conflict-free case management across several programs.

“It’s to separate direct service and case management ultimately because there’s an inherent conflict in that,” Commissioner Dr. Bowen Dilbone said when describing the federal requirement prompting the change.

DAIL said the request totals $8.6 million in Global Commitment (Medicaid waiver) funds in the governor’s budget to fund the transition. The department has finalized an RFP for independent case management providers and said the appropriation would pay for new staff and operational costs needed to separate case management from direct-service entities across Developmental Disability Services, Choices for Care and other programs. In the department’s line-item discussion, $5,842,315 was identified as the Developmental Disability Services share of that $8.6 million; Choices for Care and other program adjustments were listed elsewhere in the packet.

Jennifer Garabedian, DAIL’s Developmental Disability Services Division director, described how the roles will split: after implementation, independent case managers will handle person-centered planning, assessments and development of individual service agreements, while “service coordination” functions—such as program oversight of shared-living providers and day-to-day management—would remain with the direct-service agencies. Garabedian told the committee that DAIL’s RFP anticipates case-manager caseloads averaging about 32 individuals: “We expect that case managers will have caseloads on average of 32 individuals.”

DAIL staff stressed the change is compliance-driven and multi-year; they said many current service coordinators could remain employed by the existing agencies in roles such as program coordinators, but their billing and reporting will change. Committee members pressed for clarity on overlap and duplication; DAIL staff said the Centers for Medicare & Medicaid Services (CMS) requirements guided the design and that the state expects to work with agencies to minimize duplication.

Implementation risk and timing: DAIL described the project as a multiyear effort with a federal compliance deadline. The department said some positions and contracts will be created in SFY2026 but the full operational transition will continue beyond the initial funding year.

No formal committee votes were taken during the presentation; committee members noted the appropriation will remain under review in the budget adjustment and floor process.