Health and Welfare outlines reorganization, fleet and IT requests in budget overview

The Idaho Department of Health and Welfare on Monday detailed an internal reorganization and multiple budget requests — including vehicle replacements, IT upgrades and a request to allow personnel-to-operating transfers for licensing work — as the department began its multiweek budget hearings before the Joint Finance and Appropriation Committee.

"How you structure that organization matters," Alex Adams, director of the Idaho Department of Health and Welfare, told the committee. "I have a budget first mentality. I have the radical belief that budgets are laws, not suggestions." Adams said he accepted organizational recommendations from the prior interim director and moved to align reporting lines and accountability with where work is performed.

Alex Williamson, a Legislative Services Office budget and policy analyst, walked members through the proposed changes in the department's budget book. The reorganization proposes renaming and regrouping several divisions: family and community services (FACS) will be split out; Medicaid and behavioral health divisions will report under a promoted Medicaid administrator who retains Medicaid duties; support services and licensing will be renamed Division of Operations; public health and self-reliance would be grouped as Health and Human Services; and a new division titled Child, Youth and Family Services would house child welfare (to be named Youth Safety and Permanency), service integration (Family and Community Partnerships) and developmental disability services (Early Learning and Development).

Williamson said the department seeks to move several budgeted programs consistent with where staff administer them: Extended Employment Services (EES) and community developmental disabilities functions would move under Medicaid; the Idaho Child Care Program (historically under Self Reliance) would move into Early Learning and Development and receive a distinct appropriation unit; the Idaho Behavioral Health Plan staff and Medicaid program integrity (fraud investigations) staff would move under Medicaid.

Adams told the committee the reorganization aims to create clearer lines of visibility and accountability across a department he described as large and complex. "We've transformed behavioral health in the State. We went from being a direct service provider in many instances, to now managing it through a contract, managed care contract with Medicaid. So it made sense to have behavioral health under Medicaid in a singular line of reporting and decision making," he said.

The department also announced internal leadership changes: a new chief financial officer reporting directly to the director, a chief over legislative and regulatory affairs to centralize legislative contacts and a program manager over communications and customer experience.

Fleet and replacement requests Adams and Williamson said the department is seeking $2.8 million for replacement items in the 2026 request, including $384,000 for visitation rooms, about $648,000 for office remodels and furniture, and $1.8 million to replace 60 vehicles. Williamson described a separate Office of Information Technology hardware replacement request of about $1.8 million and an ongoing software assurance request tied to an SQL Server upgrade; the department said it currently runs SQL Server 2017 and is seeking funds to move to SQL Server 2022.

"Goal as a department is to replace the entire fleet every 7 years," Adams said, noting the department operates about 435 state vehicles and that two-thirds of vehicle use is tied to child-welfare work: transporting children for visitation and court, wellness checks and similar duties. Adams said replacement keeps staff safe and prevents frequent breakdowns; vehicles identified for replacement show odometer readings between about 105,000 and 159,000 miles.

Licensing, contract labor and transfer authority The department requested a supplemental exemption allowing licensing and certification to transfer personnel dollars to operating expense accounts — a practice the division has used to hire contract nurses to complete federally and state-required inspections when in-house staffing is insufficient. Legislative language in the 2024 session (the transcript references section 8 of Senate Bill 1268 of 2024) restricted transfers of personnel dollars within the Department of Health and Welfare, prompting the division to seek an exemption.

Adams said inspections of long-term care facilities are required on a roughly 15.9-month cycle. He told the committee the department has relied on contract nurses to supplement staffing during high vacancy periods, particularly during the COVID-era surge; contract nurses were paid about $90 to $95 per hour in recent years while agency staff performing the same work are paid about $35 per hour. He also said turnover in the licensing division has declined from pandemic highs and that some contracted amounts requested by the department in prior years were later partially reverted: "We had asked, to move 400,000. We ended up reverting 100 of that. So we used approximately 300 and, reverted approximately 100," Adams said.

IT systems and MMIS The committee also heard that the department is hiring staff tied to the Medicaid Management Information System (MMIS) upgrade, a major IT project the director characterized as an approximately $180 million effort. Williamson said several IT positions supporting MMIS had been requested and the governor recommended funding; Adams said the positions were posted and expected to be filled in the near term.

Ombudsman and other governance changes The committee was told the new state ombudsman, Trevor Sparrow, has begun engaging with the agency and the department pledged cooperation. Adams also listed senior hires he said were helping stabilize the agency, including Misty Lawrence as the new CFO and Michael Pearson as director of operations.

What the committee must decide Most of the items discussed Monday are proposed alignments or 1-time replacement requests; the governor recommended most of the plans but zeroed out one item to expand cloud server capacity after the agency identified other solutions. The committee is scheduled to set the agency's program maintenance budget later in the week and to consider enhancement and replacement requests at subsequent hearings. No formal votes on reorganization or the listed enhancements were taken Monday; committee members asked questions and directed staff and agency representatives to follow up with additional detail on fleet composition, vehicle miles and the status of MMIS hiring.