Legislative finance panel approves Medicaid supplementals, fiscal 2026 enhancements totaling hundreds of millions

The Joint Finance-Appropriations Committee on Thursday approved a package of one-time fiscal 2025 Medicaid supplementals and a second motion to add ongoing fiscal 2026 enhancements that together shift hundreds of millions in general, dedicated and federal funds.

Alex Williamson, budget and policy analyst with Legislative Services, told the committee the FY2025 package includes a one-time $1.35 million external quality review contract required by the Centers for Medicare & Medicaid Services, payments related to implementation of the Idaho Behavioral Health Plan, an updated Medicaid forecast and additional hospital assessment deposits to access federal matching funds. The committee voted to move the item forward as a bill with a new pass recommendation.

Why it matters: The measures restore and appropriate funds to meet federal mandates, draw down additional federal dollars for hospitals and recalibrate state estimates for growing Medicaid caseloads and higher per‑person costs. Several items are tied to federal rules or court mandates and to multiyear IT and managed‑care contracts, making the appropriations necessary to maintain program operations and to pursue federal matches.

Key items approved in the FY2025 supplemental motion included: a $1,350,000 one‑time appropriation for the managed care external quality review (federal requirement), funds to cover system configuration and implementation costs for the Idaho Behavioral Health Plan, an $113,849,300 update to the Medicaid forecast, a capitation rate increase request for the behavioral health plan of $108,821,400, and a dedicated hospital assessment deposit in the tens of millions to enable the state and hospitals to draw down federal upper‑payment‑limit funds.

Committee members emphasized that some items respond to federal or court requirements. Williamson said the hospital assessment money will allow hospitals to transmit assessment funds to the state’s dedicated hospital assessment account so the state can draw down additional federal funds and remit those federal dollars back to participating hospitals.

On the FY2026 motion, the committee approved ongoing appropriations and programmatic adjustments including making the hospital assessment fund ongoing, funding additional federally required CAHPS surveys, adding funds for an actuarial contract amendment, continuing an external quality review contract, and advancing the Medicaid Management Information System (MMIS) procurement. The population forecast adjustment for FY2026 was sizable; Williamson said the requested change accounts for expected caseload, utilization and the federal medical assistance percentage (FMAP) rate change.

Several legislators pressed for context on specific lines. Senator Cook and others asked for clarification about how the MMIS fund is being released as the contractor meets milestones; Senator Cook described the appropriation approach as paying only as work is completed. Several members also questioned the role and importance of actuaries; staff explained the actuarial firm provides capitation‑rate evaluations, forecasting and risk analysis for managed‑care products, and that actuarial determinations are required for capitation rates to be “actuarially sound.”

The committee also adopted bill language attached to the budget items. The language directs the Department of Health and Welfare to explore a value‑based payment model for outpatient addiction treatment and to report findings to JFAC by Jan. 15, 2026; it directs the Division of Medicaid to align multi‑year contract periods to the state fiscal year and report on progress; it adds annual reporting on emergency Medicaid expenditures and recipients; and it includes standard federal funding restriction and conditions, limitations and restrictions language.

Votes at a glance

- FY2025 Medicaid supplementals (one‑time): Moved by Senator Wintrow; second by Representative Handy. Outcome: approved; recorded as a bill with a new pass recommendation. Reported roll: Senate — 7 ayes, 3 nays; House — 6 ayes, 3 nays, 1 absent/excused. (Committee reported the motion passed by majority vote.)

- FY2026 Medicaid enhancements (ongoing/program maintenance): Moved by Representative Furness; second by Senator Burkey. Outcome: approved; recorded as a bill with a new pass recommendation. Reported roll: Senate — 7 ayes, 3 nays; House — 6 ayes, 3 nays, 1 absent/excused. (Committee reported the motion passed by majority vote.)

What was not decided or remains contingent

Several items noted by staff and legislators remain contingent on federal waivers, continued policy choices or later implementation steps. Williamson and members said House Bill 345 trailers incorporated into the FY2026 materials assume federal waivers or subsequent administrative action for full effect. Lawmakers also cautioned that forecast adjustments are estimates; if the department over‑projects, the legislature may see reversions next year, and if they under‑project further supplementals might be required.

Context: The committee moved quickly near the end of the session day to allow work groups to convene. Committee leadership and members repeatedly framed the actions as paying accrued costs, meeting federal and judicial requirements, and continuing multi‑year IT and managed‑care transitions already underway.

The measures will move forward through the legislative process as bills carrying the committee’s new‑pass recommendations.