Idaho Health and Welfare proposes internal reorganization, fleet replacements and IT staffing during JFAC budget hearing

Idaho Department of Health and Welfare Director Alex Adams and Legislative Services Office budget analyst Alex Williamson told the Joint Finance-Appropriations Committee on Jan. 13 that the agency is proposing a reorganization of its internal divisions and presented requests tied to maintaining services, replacing aging vehicles and staffing an enterprise Medicaid information-system upgrade.

The reorganization would realign several programs and divisions to reflect how work is already being done internally, Adams said, moving behavioral health and several developmental-disability programs under the Medicaid administrator, creating a chief financial officer and a chief of legislative and regulatory affairs, and renaming or reorganizing other divisions. "Budgets are laws, not suggestions," Adams said, arguing for clearer lines of accountability and daily budget management.

The changes follow what the agency described as a mismatch between internal organization and how the Legislature currently budgets programs. Alex Williamson of the Legislative Services Office said the agency requested the budget realignment to make the appropriation structure match the department's day-to-day operations.

Why it matters: Health and Welfare accounts for by far the largest appropriation the committee will consider this session. The agency said about 87% of its budget is for Medicaid and related trustee and benefit payments. Adams and Williamson told the committee that clarifying reporting lines and aligning appropriations with how programs are administered will help legislative oversight and program management.

Reorganization details and rationale

Williamson described specific moves the agency requested in the program maintenance package: split Family and Community Services into a separate division; place remaining Medicaid and behavioral-health programs under the Medicaid administrator (who would be promoted to deputy director while retaining Medicaid duties); move the Idaho Child Care Program (ICCP) to an Early Learning and Development division with its own appropriation unit; and move extended employment services (EES) and the children's developmental-disability program to Medicaid because Medicaid staff currently administer those programs. The administration also created a chief financial officer who reports directly to the director and established a legislative and regulatory affairs lead, Williamson said.

Adams said the changes are intended to improve "line of sight" and accountability. He described hiring numerous experienced state managers into new seats and emphasized the need for a budget-focused leadership structure to moderate growth and live within appropriations.

Budget context and spending trends

Williamson walked the committee through five-year appropriation and expenditure trends, noting a spike in 2022'23 largely tied to Medicaid adjustments, provider rate changes and hospital assessment-driven reimbursement changes. The department reported that in fiscal 2024 it spent about $4.9 billion overall, with the agency's work dominated by trustee and benefit payments rather than direct personnel costs.

Indirect support services and replacement items

On division-level requests, indirect support services has 259.6 authorized full-time positions and reported 29 vacancies at budget submission. For fiscal 2026 the department requested one-time replacement items totaling about $2.8 million, the agency said. That package includes $1.8 million to replace 60 vehicles, $384,000 for visitation rooms and roughly $648,000 for office remodels and furniture.

Adams told the committee the state fleet available to Health and Welfare numbers about 435 vehicles statewide, with roughly two-thirds used by child-welfare staff. He said the department's goal is to replace the fleet every seven years. Vehicles proposed for replacement are high-mileage: the department presented mileage ranges for affected vehicles that run from about 105,000 to 159,000 miles. Adams said the vehicles are used for court visits, child visitations and other child-welfare work, and that replacing them is a safety and operational priority.

IT and the MMIS upgrade

The agency also requested hardware and software replacements for agency information-technology systems. Williamson described an ongoing request for $140,000 for software assurance tied to a SQL Server upgrade and a one-time request of $1.8 million for hardware replacement. The governor's recommendation zeroed out a requested appropriation for additional cloud server capacity after the agency said it could find other solutions.

Adams said the Medicaid Management Information System (MMIS) upgrade is among the state's largest IT projects and was previously estimated at about $180 million. The department is hiring IT staff to support the MMIS work; Adams said those positions have been posted with hires expected soon.

Licensing, certification and contract surveyors

Committee members asked about licensing and certification for health-care facilities. Adams and Williamson explained the licensing division relies on contract nurses when vacancies or workloads make it difficult to meet federally required survey cadence. Adams said the division pays about $35 per hour for staff surveyors and about $90'$95 per hour for contract surveyors. He added the division has seen pandemic-era staffing pressures ease; turnover has declined from a high in earlier years to much lower rates recently.

The director and analysts said contract surveyors remain necessary sometimes to meet inspection timelines for long-term-care facilities; federal rules require regular surveys and the department must cover those slots even while filling vacancies.

Ombudsman and other operational matters

Adams told the committee the recently appointed ombudsman, Trevor Sparrow, has engaged with the department and the agency has pledged cooperation. Adams described a broader effort to place experienced state managers in key roles to improve execution and results.

Discussion vs. decisions

Committee members asked clarifying questions about the timing and mechanics of the proposed organizational alignment and the vehicle request. Williamson said the agency requested those alignment decisions be considered as part of the program maintenance package later in the week. No formal committee action on the department's program maintenance package or the vehicle replacements occurred during the Jan. 13 hearing.

What comes next

Health and Welfare will return to JFAC for division-level hearings throughout January, February and March. Williamson and Adams said the committee will have opportunities to question staffing plans, vehicle replacement lists and MMIS hiring in subsequent hearings.

Ending

Adams told the committee he will appear before JFAC multiple times through March and that staff will bring more detail on specific requests in the coming hearings. "I look forward to the day that I can engage in a PC to OE transfer as every other agency in the state already can," Adams said, referring to transfers between personnel and operating appropriation lines that are limited by current statute for this department.