Idaho lawmakers review Medicaid budget as costs, hospital assessment and contract changes drive large supplemental requests

Alex Williamson, budget and policy analyst with Legislative Services, told the Joint Finance-Appropriations Committee on Feb. 26 that the Division of Medicaid’s budget has grown substantially and that lawmakers face a series of supplementals and ongoing enhancements to balance federal requirements, contract transitions and utilization growth.

The most urgent items presented to the committee include one-time and ongoing requests tied to the state’s Idaho Behavioral Health Plan transition, an ongoing hospital assessment adjustment and a population forecast adjustment. “This will probably feel like information overload,” Williamson said at the start of her presentation.

Why it matters: Medicaid accounted for the vast majority of the division’s fiscal-year 2024 spending and continues to grow because of caseload, provider rate changes, calculation changes to hospital upper payment limits and other factors. Committee members pressed department staff about where costs are rising and what levers the state can use to control spending.

Key figures and requests

- Fiscal year 2024 appropriation: $4,560,000,000; expenditures by the division: $4,270,000,000, Williamson said.

- Personnel and operating for Medicaid administration (FY24): about $67,000,000.

- Vacancies: 24.5 unfilled positions in the division’s 237.5 FTP as of Feb. 10; Williamson said most were actively being recruited.

- Supplementals for FY2025 highlighted by the analyst include: an external quality review (EQR) contract shortfall (presented as a $1.3M–$1.35M request in different slides), $113,800,000 in one-time federal interest in benefit payments tied to updated Medicaid forecast drivers (hospital and DD service expenditures), an $108,800,000 one-time capitation rate increase for managed care plans split across plans, and a $190,000,000 hospital assessment supplemental (of which $77,000,000 is from the hospital assessment dedicated fund and $113,000,000 from federal…