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State hospitals accredited but civil commitment costs and competency caseload growth strain budget
Summary
Officials told the appropriations committee that all three state psychiatric hospitals are now accredited, enabling Medicaid billing, but rising civil commitments and a large increase in restoration-to-competency cases are driving one-time supplemental requests and pressuring general‑fund spending.
The Department of Health and Welfare told the Joint Finance-Appropriations Committee that all three state psychiatric hospitals — State Hospital North (Orofino), State Hospital South (Blackfoot) and State Hospital West (Nampa) — have received accreditation, a step the department said will permit Medicaid billing for eligible patients.
Director Alex Adams said accreditation has started to generate Medicaid receipts: “State Hospital West… has so far billed $1,600,000; they’ve received $1,300,000,” which the director characterized as reduced general‑fund need because a portion of patient care is now billed to Medicaid.
At the same hearing, analysts reported a departmental request for a $2,600,000 one‑time general‑fund supplemental to cover increased costs for mental-health holds and commitments in fiscal year 2025. Analyst Alex Williamson tied that request to a statutory change: Senate Bill 1327 of 2022 moved responsibility for civil-commitment costs from counties to the state. Williamson said the department now bears those hospitalization and transportation costs and is forecasting higher expenditures related to that change.
Officials explained the federal billing rule that affects hospital finances: Medicaid will reimburse for stays of 60 days or less; patients whose stays exceed 60 days are not billable to Medicaid and the state bears the full cost. Director Adams told the committee that the share of admissions longer than 60 days has grown and that “about 17 percent of admissions were more than that and it's grown to 37 percent,” increasing state general‑fund exposure.
The department also described rapid growth in restoration-to-competency cases — evaluations ordered after criminal charges when a defendant is determined not competent to stand trial. Ross Edmonds, administrator for the Division of Behavioral Health, said restoration-to-competency cases have risen dramatically over the past decade and that these patients now occupy a substantial portion of hospital beds. “Over the last 10 years, we've seen about a 600% increase in the restoration-to-competency increases,” Edmonds said. He added that nearly all restoration cases are subsequently restored to competency: “Nearly all of them… I would say it's probably 5 percent or less that are not restorable.”
Officials also discussed staffing and capacity. Adams reported low vacancy rates at the hospitals overall: State Hospital West 0% vacancy, State Hospital South 2.8%, and State Hospital North 11.5% — the latter higher because of recruitment challenges in the Orofino area. The department said these staffing levels affect how quickly patients can move from community hospitalization to state facilities and thus influence community-hospitalization costs and waitlists. At the time of the hearing, the department reported about eight people waiting for admission to State Hospital North and about 18 at State Hospital South.
Why it matters: The combination of higher-than-expected holds and longer stays shifts costs to the state general fund when Medicaid billing is not available and has prompted one-time supplemental requests and fund-shift proposals. The department asked the committee for transfer-exemption authority similar to other divisions so it could reallocate funds without returning for supplemental appropriations.
No formal committee vote on the supplemental was recorded at this hearing; the requests were presented to the committee for consideration in the budget process.
