Idaho behavioral health budget request seeks federal carryover, transfer flexibilities

Alex Williamson, budget and policy analyst with the Legislative Services Office, presented the Division of Mental Health Services budget and told the Joint Finance-Appropriations Committee the division now has 278.23 full-time positions after committee action and that budget pages are on 2-091 of the legislative book.

The agency asked the committee for a supplemental appropriation to access federal grant funds tied to the Idaho Behavioral Health Plan (IBHP) and for broader authority to transfer funds between program categories. "There are three federal grants issued to Idaho in relation to Go Live," Williamson said, and the department is seeking a fiscal-year-2025 supplemental of $6,700,000 (federal, one-time) plus a 2026 ongoing federal operating increase of $261,400 to cover grant-administered operating expenditures.

Why it matters: those federal grants were appropriated to an earlier year (2022) and, because IBHP experienced implementation delays and went live in July 2024, the department needs legislative authority now to access those grant dollars. The division also asked for exemptions to statutory program-transfer limits (Idaho Code 67-3511) for fiscal year 2025 and for the 2026 budget so it can move funds department-wide into adult and children’s mental health if needed.

Director Alex Adams of the Department of Health and Welfare told the committee the IBHP procurement and implementation process drew legal challenges and other delays. "I believe this was the largest contract in the history of the state, so I do think it is wise and prudent for the department to do it right versus to do it quickly," Adams said. He added the contract attracted litigation that delayed implementation by about a year.

Adams and Williamson said the supplemental requests and transfer exemptions are intended to let the department use federal funding that otherwise cannot be accessed because the timing of awards and the original appropriation year do not match. Adams described the division budgets that are not Medicaid entitlements as "gap filler" programs — services that cover non-Medicaid patients or services Medicaid does not cover (for example, respite care). He warned that without the transfer authority the department may need to make service reductions to stay within the base appropriation.

Senators and representatives pressed the department on causes and consequences of the delays and budget shortfalls. Senator Wintrow asked what has gone well and what challenges stakeholders have raised; Adams pointed the committee to the Medicaid budget discussion scheduled in March for a fuller conversation about IBHP’s ongoing contract and costs. Adams also said initial service delivery after the July go-live experienced "speed bumps" but ultimately "went relatively smooth." He told the committee the most significant challenge has been budget forecasting: "the budget that was estimated was off by a factor of about 60%," he said, which will affect Medicaid-related budget conversations.

On temporary service suspensions, Adams said the department temporarily suspended some children’s mental health services earlier in the year to live within the set appropriation rather than ask immediately for a supplemental. "We were faced with two options. One, you keep the spigot open and come here and ask for a supplemental. The other is you take action to live within the budget and you temporarily suspend," he said.

What the request would do: the supplemental would allow the department to access federal dollars tied to the IBHP go-live, and the transfer exemptions would let the department move funds across object classes and programs within statutory limitations to respond to unforeseen costs in adult and children’s mental health.

Details and context omitted or not specified: the department provided line-item dollar splits in the committee materials; several senators requested additional information about procurement timing and contractor choices (references to Magellan and Janus were raised during questioning). The transcript did not include a formal vote on the transfer-exemption request; the department asked the committee to consider those authorities in the current budget cycle.

Looking ahead: the committee indicated it will continue scrutiny of IBHP and related Medicaid budgeting in subsequent hearings. Director Adams said he and staff will provide more detailed follow-ups to committee members who requested procurement and program performance information.