JFAC approves $415.2 million in Medicaid FY2025 supplementals; greenlights $674.2 million FY2026 package

The Idaho Joint Finance-Appropriations Committee on Thursday approved one-time supplementals for the Department of Health and Welfare’s Division of Medicaid for fiscal year 2025 totaling $415,226,800 and a FY2026 maintenance package totaling $674,192,600, the committee’s clerks said during roll-call votes.

The measures fund a range of Medicaid obligations, including a managed-care external quality review required by the Centers for Medicare & Medicaid Services, updates to the Medicaid expenditure forecast, capitation-rate increases for the Idaho Behavioral Health Plan, and transfers to the hospital assessment fund to draw additional federal matching dollars.

Alex Williamson, budget and policy analyst with Legislative Services, told the committee the FY2025 supplementals include an external quality review contract, system-configuration costs tied to the Idaho Behavioral Health Plan, an updated Medicaid forecast and an increase to behavioral-health capitation rates, along with additional assessments to support hospitals’ upper payment limit calculations. Williamson presented the spending items and the fiscal packet on the committee’s “purple packet.”

"This is a federal requirement," Williamson said while describing the managed-care external quality review. "The Idaho Behavioral Health Plan went live this last July. There’s been implementation costs related with that go live."

The committee approved the FY2025 package on a roll call that produced the same recorded result in both votes taken: Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused. Committee staff announced the package will move forward as a bill with a new-pass recommendation.

For FY2026, the maintenance package includes funding to make several FY2025 items ongoing (including the hospital assessment appropriation), additional appropriations for the Medicaid Management Information System (MMIS) procurement, a population forecast adjustment tied to changes in caseload, utilization and the federal medical assistance percentage (FMAP), an actuary contract amendment, expanded surveys required by federal law, and a $200,000 ongoing appropriation tied to the K.W. litigation settlement for the adult developmental-disability resource-allocation assessment tool.

Representative Furness, who moved the FY2026 motion, summarized the larger drivers of the increase as hospital-assessment activity and population/forecast adjustments, and described the total budget increase as about 11.5 percent when compared with the existing baseline. "When you look at the higher cost for utilization, that's how many times people go in to see the doctor," Furness said.

Senator Cook and other members discussed the practical reasons behind several requests: the MMIS funds are drawn from an existing dedicated MMIS fund as milestones are met; the actuary amendment reflects that the division does not employ in-house actuaries and relies on contracted actuarial services to certify capitation rates and perform forecasting; and the hospital assessment funding is intended to allow hospitals to transmit assessments that enable the state to draw federal matching dollars under an updated upper-payment-limit methodology.

The committee also adopted several reporting and policy language provisions attached to the appropriation. Those include a report on value‑based payment models for outpatient addiction treatment due to JFAC by Jan. 15, 2026; a requirement that the Division of Medicaid align contract periods with the state fiscal year and report progress by Jan. 15, 2026; an annual emergency-Medicaid report on clients served and expenditures due to JFAC by Sept. 15 following each fiscal year; and standard federal-funding restriction language.

A unanimous-consent request from Representative Furness to adopt the budget language on the screen was granted by the committee without objection.

Votes at a glance

- FY2025 Medicaid supplementals (one-time): Passed by recorded roll call. Senate: 7 ayes, 3 nays. House: 6 ayes, 3 nays, 1 absent/excused. Committee staff said the motion will go forward as a bill with a new-pass recommendation. Total one-time addition reported by committee: $415,226,800 (breakdowns provided in committee packet).

- FY2026 Medicaid maintenance package (ongoing and program-maintenance items): Passed by recorded roll call. Senate: 7 ayes, 3 nays. House: 6 ayes, 3 nays, 1 absent/excused. Committee reported total additional FY2026 funding of $674,192,600 (split by fund sources noted in packet).

What changed and what’s next

The committee approved ongoing authority to continue the hospital assessment funding approach adopted in the supplemental, additional contract authority for MMIS work already funded in a dedicated account, and expanded reporting requirements tied to program and contract changes. Committee members and staff repeatedly cautioned that forecasting is probabilistic and that reversions or future supplementals may be necessary if actual expenditures differ from current estimates.

Committee members directed staff and the division to provide the reports included in the adopted language and encouraged work-group follow-up; the committee adjourned with instructions to reconvene work groups and continue budget work the following day.

(Exact line-item amounts and some line descriptions were read aloud during the hearing and are recorded in the committee packet; where the committee text or spoken motion contained transcription ambiguities, the article reports totals and the principal line items as presented in committee.)