Idaho JFAC approves $415 million in Medicaid supplementals, authorizes $674 million in FY2026 enhancements

The Joint Finance-Appropriations Committee on an affirmative roll call approved a $415,226,800 supplemental package for the Department of Health and Welfare’s Division of Medicaid and later approved a FY2026 enhancement package totaling $674,192,600.

The FY2025 supplemental motion, moved by Senator Wintrow and seconded by Rep. Handy, covered one-time and dedicated fund needs including a $1,350,000 external quality review contract for managed-care plans, $113,849,300 to cover updated Medicaid forecasts, an $108,821,400 capitation-rate increase for the Idaho Behavioral Health Plan, and $77,243,700 in dedicated hospital-assessment funds to access federal matching dollars. The committee recorded a majority vote in favor and the motion will proceed as a bill with a “pass” recommendation.

The committee then approved a related FY2026 package, moved by Rep. Furness and seconded by Senator Burkey, that makes the hospital assessment ongoing, adds funds for a CAHPS survey contract, funds an actuary contract amendment, releases previously set-aside MMIS funds as milestones are met, and increases the population/forecast adjustment. That motion passed on a similar roll-call tally and will go forward as a bill with a pass recommendation.

Why this matters: Committee members described the measures as necessary to meet federal requirements, respond to higher-than-expected utilization and cost, and to enable the state and hospitals to draw federal funds under an updated upper payment limit methodology. The actions fund current-year shortfalls and establish ongoing appropriations and reporting conditions intended to improve oversight of Medicaid spending.

Details of the FY2025 supplemental Alex Williamson, budget and policy analyst with Legislative Services, summarized the supplemental items and amounts on the record. Key items included: - Managed care external quality review (EQR): $1,350,000 (one-time) to meet a Centers for Medicare & Medicaid Services (CMS) requirement for states with managed care organizations. Williamson said, “This is a federal requirement. This is how much it costs.” - Idaho Behavioral Health Plan system configuration and capitation adjustments: roughly $695,500 for system configuration follow-up costs and $108,821,400 for higher-than-expected capitation costs driven by greater enrollment and acuity. - Updated Medicaid forecast: $113,849,300 to cover projected final entitlement costs for FY2025 as additional months of expenditure data refined the forecast. - Hospital assessment fund (dedicated): $77,243,700 to front assessment funds that enable the state to draw additional federal matching funds under a revised upper payment limit calculation; hospitals then receive increased federal flows remitted back to them.

Committee discussion and rationale Committee members emphasized different rationales for the items. Several members framed supplementals as payment of already-incurred obligations; others noted federal and court mandates. Representative Furness and Senator Cook questioned the role and necessity of certain line items, particularly the actuary contract amendment and MMIS procurement oversight.

On actuarial services, the committee heard that Medicaid relies on outside actuarial firms for capitation-rate development, forecasting and risk evaluation because there are no in-house actuaries. Senator Cook stressed the department’s dependence: “The actuary, we can't live with, we'll be running totally blind without them.”

On the hospital assessment, staff explained the assessment functions as a fronting mechanism: the state holds dedicated assessment receipts to draw matching federal funds, which are then remitted to hospitals to approximate Medicare rates.

FY2026 enhancements and policy language The FY2026 package included: - Making the hospital assessment ongoing. - Funding two additional CAHPS patient-experience surveys required by federal rules. - $1,100,000 for an actuary contract amendment (split federal/general as requested) to expand actuarial hours and services. - Appropriations from the MMIS (Medicaid Management Information System) dedicated fund tied to milestone-based IT procurement progress. - A population/forecast adjustment of $376,124,900 (split between general fund and federal funds) to reflect FMAP changes, caseload, utilization and price updates. - Reorganization and technical moves including adding three full-time positions and moving extended employment services into the Division of Medicaid (net zero department effect).

The committee also adopted budget language directing the Division of Medicaid to: explore a value-based payment model for outpatient addiction treatment and report findings to JFAC by Jan. 15, 2026; align contract periods with the state fiscal year and report progress by Jan. 15, 2026; produce an annual emergency Medicaid report on clients served and expenditures by Sept. 15 following each fiscal year; and standard federal-funding restriction language. Senator Wintrow and other members cautioned that the new reporting requirements add workload to existing staff with no dedicated additional personnel funding.

Votes at a glance - FY2025 Medicaid supplementals: Approved (committee recorded majority; will go forward as a bill with pass recommendation). Totals listed by staff: $415,226,800 (one-time), split $511,400 general fund, $77,243,700 dedicated, $337,471,700 federal (as presented by staff). - FY2026 Medicaid enhancements: Approved (committee recorded majority; will go forward as a bill with pass recommendation). Totals listed by staff: $674,192,600 (ongoing adjustments and transfers), split $70,141,900 general fund, $88,963,700 dedicated funds, $515,087,000 federal funds (as presented by staff).

What the committee did not decide The committee approved appropriations and reporting directives; it did not finalize waiver approvals or other federal agreements necessary to implement elements tied to House Bill 345. Members noted some budget items and projected savings tied to HB345 are contingent on federal waivers or future administrative actions.

Next steps Both motions were reported out with “pass” recommendations and accompanying draft language; staff directed the Division of Medicaid to prepare the required reports and to coordinate with work groups for follow-up. The committee scheduled work groups and further floor deadlines as it moved to conclude the day’s agenda.