JFAC approves Medicaid supplementals, ongoing enhancements including hospital assessment and MMIS funding

The Joint Finance-Appropriations Committee on an affirmative roll-call vote approved a package of fiscal-year 2025 supplementals and a set of fiscal-year 2026 enhancements for the Idaho Department of Health and Welfare’s Division of Medicaid.

Alex Williamson, budget and policy analyst with Legislative Services, told the committee the FY2025 supplemental motion grouped multiple items to expedite action and cover accrued costs. "This is a federal requirement," Williamson said of the managed care external quality review, referencing a required review for Idaho’s managed care organizations.

The measures approved on the supplemental motion included a one-time $1.35 million for the managed care external quality review; payments tied to system-configuration and implementation costs for the Idaho Behavioral Health Plan; an updated FY2025 Medicaid forecast request of $113,849,300 to cover higher-than-anticipated entitlement costs; a $108,821,400 capitation-rate increase for the Idaho Behavioral Health Plan; and $77,243,700 in dedicated funds related to a hospital assessment mechanism that allows the state to draw additional federal funds under an updated upper-payment-limit calculation. Senator Wintrow moved the FY2025 supplemental package and Representative Handy seconded the motion. Committee summaries recorded the Senate vote at 7 ayes and 3 nays and the House members present at 6 ayes, 3 nays, with 1 member absent or excused; the motion was reported to go forward as a bill with a pass recommendation.

On the FY2026 package, the committee approved an ongoing appropriation to make the hospital assessment fund permanent, an actuarial contract amendment (about $1.1 million, split roughly half federal and half general funds), additional ongoing money for required CAHPS surveys, funds for the MMIS (Medicaid Management Information System) procurement from an already established dedicated fund, population forecast adjustments totaling roughly $376.1 million (split between general and federal funds as shown in the packet), and a transfer of extended employment services into the Division of Medicaid (3 full-time positions and an associated general-fund amount). Representative Furness moved the FY2026 package; Senator Burkey seconded. Committee summaries again showed a Senate tally of 7 ayes and 3 nays and a House tally of 6 ayes, 3 nays, and 1 absent or excused; the motion passed and will go forward as a bill with a pass recommendation.

Committee discussion emphasized that several items were required by federal or legal obligations. Williamson said the managed care external quality review and additional CAHPS surveys are federal requirements tied to the state’s participation in Medicaid-managed care. The hospital assessment amount was described as money hospitals must transmit to a dedicated account so the state can draw down additional federal matching funds under a new calculation methodology for the upper payment limit. "The state does benefit," Williamson said regarding the mechanism, noting a roughly 30% return in federal funds on the assessed total as described during the hearing.

Members also discussed forecast uncertainty. Representative Furness and others stressed that forecasts can be inaccurate: if the department overestimates expenditure needs, the state will realize a reversion; if it underestimates, the Legislature may need to consider another supplemental. Senator Cook and others described the actuary services as essential to rate-setting and forecasting; Williamson said the Division of Medicaid has no in-house actuaries and is reliant on outside actuarial contracts for capitation-rate work and other analyses.

The committee adopted language attached to the budget package that, among other items, directs the Department of Health and Welfare to: explore a value-based payment model for outpatient addiction treatment and report to JFAC by Jan. 15, 2026; align Medicaid contract periods with the state fiscal year and report progress by Jan. 15, 2026; and produce an annual emergency Medicaid report on clients served and total expenditures no later than Sept. 15 following each fiscal year. The packet also included standard federal-funding restriction language and conditions, limitations and restrictions consistent with other departmental budgets.

Several members urged attention to implementation. Senator Burkey and others said House Bill 345 (referred to in committee briefing materials as a trailer bill) includes provisions that will require waivers and additional work before the department can realize anticipated savings. Senator Burkey said the committee must be prepared to assist and follow through on oversight work.

The committee concluded its session by approving the budget language and adjourning to work groups. The committee recorded formal roll-call votes for both the FY2025 supplemental package and the FY2026 enhancements; both motions passed and will be carried forward as bills with pass recommendations.

Votes at a glance FY2025 Medicaid supplementals: Motion moved by Senator Wintrow; seconded by Representative Handy. Summary tally reported on the record: Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused. Outcome: passed; reported as a bill with a pass recommendation. FY2026 Medicaid enhancements and baseline adjustments: Motion moved by Representative Furness; seconded by Senator Burkey. Summary tally reported on the record: Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused. Outcome: passed; reported as a bill with a pass recommendation.

What’s next The budget language requires the Division of Medicaid to file several reports with JFAC by specified dates (Jan. 15, 2026, and Sept. 15 following fiscal years). Several appropriations (notably the MMIS funds) draw on previously set-aside dedicated funds; other increases reflect forecasted caseload and utilization changes that will affect FY2026 spending unless actual experience differs from the forecast.