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House committee hears DMH request for $16.5M for First Steps; Medicaid enrollment requirement cited as federal shortfall driver
Summary
Department of Mental Health officials told the House Budget Committee they seek $16.5 million to expand First Steps early‑intervention services and to cover higher costs and caseload growth. Officials flagged a roughly $3 million federal shortfall caused by a federal requirement that individual First Steps providers enroll as Medicaid providers.
Department of Mental Health (DMH) officials told the House Budget Committee that demand for the First Steps early‑intervention program has risen and that FY25 needs include a $16.5 million increase to serve more infants and toddlers with developmental delays.
Why it matters: First Steps delivers early intervention services to children birth through age 3. DMH officials said the program produces better long‑term outcomes when children are reached early; at the hearing they also warned that missed capacity or funding gaps would create access constraints.
What officials said: DMH and program staff testified that caseloads and service units have grown sharply since the pandemic years. The department provided fiscal year comparisons showing enrolled children rising from roughly 15,000 in FY22 to nearly 19,500 in FY24, while service units increased from about 36 million units to about 58 million units in the same period. That demand, staff said, is a major driver of the supplemental request.
DMH Chief Operations Officer Shelly Woods told lawmakers that a recent federal review has prompted a change: providers supplying First Steps services must enroll as Medicaid providers. Many individual providers have historically not been enrolled in Medicaid, Woods said, and the change will reduce the federal match DMH can claim. The department estimates about $3 million of the requested supplemental stems from that federal shortfall.
Lawmakers pressed department leaders on whether the department and Medicaid could assist providers in obtaining Medicaid enrollment. DSS and DMH witnesses said DSS’s Medicaid staff had offered enrollment support for providers and that coordinated assistance could reduce state costs if more eligible providers sign up.
Committee requests and follow up: Members asked DMH for details on provider counts, unit rates and the specific mechanics of the Medicaid enrollment requirement. DMH staff said they would provide additional breakout data, including how much of the request funds expanded provider rates, capacity increases and the Medicaid shortfall.
Ending: The committee did not take action on the supplemental but asked DMH and Medicaid staff to return with the requested detail for budget deliberations.
