JFAC approves Medicaid supplementals, larger FY2026 Medicaid request including hospital assessment and MMIS funding

The Joint Finance-Appropriations Committee approved one-time FY2025 supplementals for the Department of Health and Welfare’s Division of Medicaid and forwarded a larger FY2026 maintenance package that increases funding for hospital assessments, Medicaid IT (MMIS), actuarial services and population forecast adjustments.

Alex Williamson, budget and policy analyst with legislative services, told the committee the FY2025 package included federal and state costs to meet federal requirements and unanticipated utilization, and described the FY2026 items as ongoing and programmatic needs.

Why it matters: the actions appropriate state and federal funds that support hospital payments, managed care oversight and a multi-year Medicaid IT replacement. Several items are tied to federal requirements or court orders, and one major change (the hospital assessment) affects how Idaho draws federal matching funds under upper-payment-limit calculations.

The FY2025 supplemental motion combined several items into a single, one-time package rather than considering each individually. The Division of Medicaid requested the funds to cover: a managed-care external quality review required by the Centers for Medicare & Medicaid Services (CMS); implementation costs and configuration fixes for the Idaho Behavioral Health Plan after its recent go-live; updated Medicaid forecasting for residual entitlement costs; a capitation-rate increase for the Idaho Behavioral Health Plan; and additional hospital assessment deposits to access federal matching funds.

Committee discussion focused on the nature of the federal requirements and forecasting uncertainty. Williamson said the managed care external quality review is a CMS federal requirement and that Idaho currently has four plans subject to that review. She described the updated forecast as a recalculation based on more months of actual spending and the capitation increase as driven by higher-than-expected utilization and acuity among enrollees.

Committe…