Health and Welfare outlines reorganization, requests fleet, IT and licensing flexibilities

The Idaho Department of Health and Welfare told the Joint Finance-Appropriations Committee on Jan. 13 that it has reorganized internal divisions to improve accountability and alignment with how the department is already administering programs, and presented several budget requests tied to that reorganization and operations.

Alex Williamson, budget and policy analyst with the Legislative Services Office, walked JFAC members through the department’s proposed structure and specific budget requests. The agency seeks to realign program appropriations to reflect operational responsibility — for example, moving behavioral health and several children's developmental disability programs under the Medicaid administrator and creating a new division titled Child, Youth, and Family Services.

“Historically there's been a disconnect between how the department organizes internally, and how JFAC and the legislature budget these programs,” Williamson said. She said the reorganization request is intended to align budgeted programs with where the work is being done and would be considered in the committee’s program maintenance work this week.

Director Alex Adams described the changes as intended to provide clearer lines of visibility and accountability. “How you structure that organization matters,” Adams told the committee, noting the department’s size and statutory responsibilities. Adams said he created a new chief financial officer position reporting directly to the director and added a chief over legislative and regulatory affairs to provide a single point of contact to the Legislature.

Budget items and operational requests discussed during the hearing included:

- Vehicle replacements: The department requested replacement items totaling about $2.8 million, which include $1.8 million to replace 60 vehicles. Adams said the department operates about 435 state vehicles statewide and aims to replace the fleet on a seven-year cycle; many child-welfare uses require vehicles equipped for family visitations and car seats. He said many vehicles proposed for replacement have between 105,000 and 159,000 miles.

- IT and systems: The department noted a request for hardware and SQL Server upgrades. Williamson said the department currently uses SQL Server 2017 and requested funds to upgrade to the 2022 version; the governor recommended most agency requests but removed a separate request for cloud server capacity after the agency found other solutions.

- MMIS staffing: The Medicaid Management Information System (MMIS) upgrade continues to be a major multi-year IT project. Adams said several IT positions related to MMIS have been posted and were expected to be filled in the coming weeks to support a large modernization effort.

- Licensing and certification: Licensing and Certification asked for a supplemental exemption from transfer restrictions in Section 8 of Senate Bill 1268 (2024) that prohibit transferring personnel dollars to other expense classes for Health & Welfare. The division has historically used contract nurses to perform facility surveys and said it needs the flexibility to move personnel dollars to operating expenditures to pay contract nurses when vacancies or workload require it. Director Adams said other state agencies have statutory authority to transfer personnel (PC) to operating (OE) and that Health & Welfare’s restriction is unique; he told the committee the department had reverted part of a prior transfer request and used approximately $300,000 of a previously approved $400,000 transfer in the most recent year.

- Ombudsman and EES placement: Committee members heard that the state ombudsman (Trevor Sparrow) has been meeting with the department and that Extended Employment Services (EES) is being moved in the budget to fall under Medicaid to reflect where the staff who administer the program currently work.

Committee members asked for additional detail on fleet age and mileage, the split between contract and staff costs in licensing surveys, and whether the IT/engineering salary changes discussed earlier apply across all agencies. Williamson and Adams said they would follow up, and the department agreed to provide lists and hiring status updates for MMIS and fleet inventories.

Why it matters: The reorganization and associated budget adjustments affect how the department budgets and manages large programs that account for most of the state's Medicaid and benefit spending. The licensing transfer exemption could change how Health & Welfare pays for contract surveyors that inspect nursing homes and other facilities; the vehicle and IT requests are linked to child-welfare operations and a multiyear Medicaid IT modernization effort.

What happens next: The committee will consider program maintenance for Health and Welfare later in the week and the "other programs" enhancement bill the following Friday. Work groups will dig into division-level detail, and staff said agency slides and materials will be made available in the JFAC SharePoint for follow-up questions.