Behavioral health managed-care rollout drew payment problems early; department says vendor remediation underway

Idaho’s Department of Health and Welfare told the Joint Finance-Appropriations Committee on Feb. 26 that the July 1, 2024 rollout of the Idaho Behavioral Health Plan (IBHP) required additional system configuration work and triggered early provider payment disruptions that the department and vendor have been remediating.

Deputy Director Juliette Sharon said the IBHP contract was ‘‘significantly larger than the historical IBHP contract’’ and included services previously paid fee‑for‑service and some behavioral‑health functions historically run by the division. As a result, additional interfaces, system configuration and testing were required to capture utilization and enrollment data necessary for federal reporting and state oversight.

Why this matters: Managed‑care rollouts can create payment timing and claims‑processing risks for community providers; the department said timely payments are a priority and that corrective steps — including liquidated damages and corrective action plans — have been imposed on the vendor.

Several legislators described provider complaints they had received. Juliette Sharon and Director Alex Adams told the committee the state has imposed more than $100,000 in liquidated damages on the vendor (Magellan) and that the vendor remains under corrective action plans and management letters for contractual failings. The department said many initial problems (including mailing/address issues and provider education for electronic funds transfers) have been addressed and that timeliness measures are back in compliance.

Senator Cook described repeated reports from federally qualified health centers and other providers that payments were delayed; Sharon said the department conducted follow‑up audits and provider education and had resolved the most significant issues reported earlier in the contract’s life. The department cautioned that while progress has been made, it expects ongoing monitoring and acknowledged the possibility of isolated future provider problems.

Separate procurement and contracting issues were discussed: analysts said the state issued requests for proposals for the managed care external quality review (EQR) and received no responsive bids; an RFI showed market rates higher than historical payments, prompting an increased request in the governor’s recommendation. The committee did not take action on those procurement funding requests in the hearing.

Department officials offered to follow up with legislators on outstanding provider questions and to provide more detailed monthly vendor performance reports.