State officials cite legal challenges and budgeting gaps in delayed Idaho Behavioral Health Plan rollout

Alex Williamson, a budget and policy analyst with the Legislative Services Office, told the Joint Finance-Appropriations Committee that the Department of Health and Welfare is seeking a one-time federal supplemental of $6,700,000 and an ongoing federal-funded operating enhancement of $261,400 related to the Idaho Behavioral Health Plan (IBHP).

The supplemental is intended to give the department authority to access federal grants that were awarded in 2022 but could not be used because the IBHP go-live was delayed until July 2024, Williamson told committee members. She said the ongoing $261,400 would fund operating expenses tied to grants administered by the federal Substance Abuse and Mental Health Services Administration (SAMHSA).

Department Director Alex Adams said the IBHP contracting process and implementation preceded his tenure and that the agency faced “legal challenges” that delayed contracting. “I believe it is 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 told the committee.

Adams and Williamson also described a separate budget request: an exemption to Idaho Code 67-35-11’s 10% program-transfer limitation. The department asked the committee to allow broader program transfers for fiscal year 2025 and to remove additional transfer limitations in 2026 so it could move resources department-wide into adult and children’s mental health if unforeseen expenditures occur. Williamson said the governor supports the no-transfer-limits recommendation for psychiatric hospitalization and mental health divisions.

Senators and representatives pressed the department on the delays and contracting timeline. Senator Cook asked why the request took so long to bid and award, and Adams cited year-long legal challenges and the size of the contract as key factors. Representative Tanner and others asked whether contractor choices — Magellan and private vendors named in the discussion — were appropriate; Adams said the department is “agnostic” about which contractor is selected so long as contract standards and responsiveness are met.

Senator Wintrow asked the director to summarize what has gone well and what challenges stakeholders have raised since IBHP went live; Adams deferred a fuller discussion to the Medicaid budget hearing scheduled later in the session and said budget variance is the biggest challenge, noting IBHP’s initial budget estimate was “off by a factor of about 60%.”

The officials emphasized that the budget items before the committee function as “gap-fillers” for services Medicaid does not cover and for non‑Medicaid patients, and that the requested transfer exemptions would give the agency flexibility to move funds to cover unanticipated expenses in children’s and adult mental health programs.

No formal committee vote was recorded on the supplemental or the transfer-exemption request during this hearing; actions were presented as agency requests for legislators’ consideration in upcoming appropriation decisions.