Senate committee removes provider-facing behavioral health rules as state shifts services to contractor

BOISE — The Idaho Senate Health and Welfare Committee voted to repeal and amend a series of rule chapters that described the Department of Health and Welfare (DHW) as a direct provider of substance use disorder and mental-health services, reflecting a shift in service delivery to a contract manager role under Magellan, a private contractor whose statewide behavioral-health contract took effect July 1, 2024.

The committee approved separate dockets that remove or rewrite rules for substance use disorder services, adult mental health services and children's mental health services. Committee members and department staff said the text of the rules was left in place longer than necessary after the contract began and that the dockets align rules with current practice: DHW now oversees the contract rather than providing treatment directly.

Jared Larson, Legislative and Regulatory Affairs Chief for DHW, told the committee the department had prepared for the transition over two years and that repeal of provider-facing language simply reflects that the contract, not DHW as a direct operator, governs service delivery. "That contract reflects what was in these rules, and that is how the contract was set up, but these rules talk to us as if we continue to be a service provider," Larson said.

The rulemaking also included a change intended to increase workforce flexibility for substance use disorder providers: the department added a second acceptable certifying organization (IBADCC and NCCAP were named in the rule text) so clinicians certified by those bodies could qualify to provide services in Idaho. DHW said that change responds to a shortage of SUD providers and to professionals moving to Idaho who hold certifications the state previously did not accept.

Peyton Darst, representing the Idaho Behavioral Health Association, testified in support of that reciprocity, saying it will help expand the workforce "without suffering any type of consequences due to quality of care." Darst told the committee workforce shortages are one of the sector's most critical problems and that the change would improve access to care.

Committee members asked whether the changes remove statutory obligations. Larson and Deputy Director Juliette Sharon said the statutory obligation for the state to assure behavioral-health services remains in state law; the dockets remove rules that described DHW as the direct deliverer of services. "The underlying requirement on the department to provide these services is in statute," Larson said.

The three dockets were approved on voice votes: the substance use disorder rule change (motion by Senator Wintrow, second by Senator Ziderfeld) carried; the adult mental-health docket (motion by Senator Harris, seconded by Senator Ziderfeld) carried; and the children’s mental-health docket (motion by Senator Ziderfeld, second by Senator Harris) also passed.

Committee members and department staff also discussed public comment and negotiated rulemaking. Larson said negotiated rulemaking occurred and that the department received comments, including at least one critical comment from an existing certifying body unhappy about adding another certifier; the department judged the addition to be in the public interest.

DHW staff said that concerns raised in public comment often related to current practices rather than new policy and that existing operational safeguards remain in place under the Magellan contract. Deputy Director Juliette Sharon said clinicians — typically child psychiatrists or other clinicians with pediatric expertise — will continue to make medical-necessity determinations when required, and that the contract and Medicaid requirements govern payment and care authorization.

Copies of the dockets show the contract with Magellan went into effect July 1, 2024; the committee did not amend or revoke that contract during the hearing. The committee's action removes rule text that addressed DHW as a provider and clarifies that DHW will exercise oversight under contract.

Votes at a glance: - Docket 16-0717-2401 (Substance use disorder services): Motion by Senator Wintrow; second Senator Ziderfeld. Outcome: approved (voice vote). - Docket 23-332-401 (Adult mental health services): Motion by Senator Harris; second Senator Ziderfeld. Outcome: approved (voice vote). - Docket 16-0730-0324-00001 (Children's mental health services; docket numbering per packet): Motion by Senator Ziderfeld; second Senator Harris. Outcome: approved (voice vote).

The committee adjourned after completing this series of dockets; DHW staff said members of the public can raise implementation concerns with the department or directly with Magellan through established channels.