JFAC approves Medicaid supplementals, ongoing Medicaid funding and reporting trailers

The Joint Finance-Appropriations Committee voted to approve a package of fiscal year 2025 supplemental appropriations and a set of FY2026 enhancements and ongoing appropriations for the Division of Medicaid in the Department of Health and Welfare.

Alex Williamson, budget and policy analyst with Legislative Services, told committee members the FY2025 supplemental package combined several line items into a single motion to speed consideration. The supplemental included $1,350,000 (one time) for the managed care external quality review required by the Centers for Medicare & Medicaid Services (CMS); $1,000,008 and related implementation costs tied to the Idaho Behavioral Health Plan system configuration; $113,849,300 to cover an updated Medicaid forecast for FY2025; $108,821,400 for an Idaho Behavioral Health Plan capitation rate increase; and $77,243,700 in dedicated funds for the hospital assessment fund to allow hospitals to transmit assessments that unlock additional federal funds. Williamson said the supplemental totals $415,226,800 across general, dedicated and federal funds.

The committee then approved a FY2026 package that makes portions of the supplemental ongoing and adds other maintenance items. Representative Furness moved the FY2026 program maintenance motion that included making the hospital assessment ongoing ($190,510,600 ongoing in the packet line), $67,600 for additional CAHPS survey contracts required by federal rules, $200,000 ongoing for the adult developmental disability (DD) resource-allocation model associated with the KW lawsuit settlement, a $1,100,000 actuary contract amendment (split half general fund/half federal), funding to continue the MMIS (Medicaid Management Information System) procurement, and a $376,124,900 population forecast adjustment to reflect projected caseload, utilization and a change in the federal medical assistance percentage (FMAP). The FY2026 motion was reported as an overall increase of $674,192,600 across funds (packet breakdown as moved by the sponsor).

Committee members discussed key drivers of the increases. Senator Cook said actuarial work is essential: "they the current contract provides support for all of the managed care products...the capitation rate has to be considered actuarially sound." Representative Furness and others stressed forecast uncertainty; Furness said of forecasts, "It is guaranteed just like economists. They guarantee it will be wrong. It will be too low or too high." Senators and representatives also noted that a portion of the hospital assessment functions as a forwarding mechanism so hospitals can access federal upper-payment-limit funds, with the state drawing down a federal match that largely returns to hospitals.

The committee also incorporated reporting and policy language as budget trailers. The packet language directs the Division of Medicaid to: explore a value-based payment model for outpatient addiction treatment and report findings to JFAC by Jan. 15, 2026; align Medicaid contract periods with the state fiscal year and report progress by Jan. 15, 2026; create an annual emergency Medicaid report on clients served and total expenditures (report due to JFAC following fiscal year close, no later than Sept. 15); and include standard federal-funding restriction language and other conditions and limitations already used in similar budgets. Williamson noted some provisions are contingent on obtaining federal waivers tied to House Bill 345’s implementation.

Votes at a glance: The FY2025 supplemental motion and the FY2026 program maintenance motion each passed on roll calls reported by the committee. The recorded final tallies reported to the committee were: Senate — 7 ayes, 3 nays; House — 6 ayes, 3 nays, 1 absent/excused; combined — 13 ayes, 6 nays, 1 absent/excused. The committee chair directed staff to carry the measures forward as bills with a “new pass” recommendation.

The committee debated several policy and implementation issues during the hearing: whether required reports create additional workload without added staff, the role of actuarial firms for rate-setting and forecasting, the intent and mechanics of the hospital assessment and upper-payment-limit draws, and contingencies tied to federal waivers for the House Bill 345 trailers. Senator Wintrow and Representative Furness emphasized the need for close legislative oversight if the state moves more services into managed care structures.

The committee accepted the packet language on the record by unanimous consent and set follow-up reporting deadlines included in the packet. The meeting then moved to scheduling and adjourned, with committee members directed to attend work groups the following morning to continue deliberations on other agency budgets.

Ending: The motions will be carried forward as bills with a committee “new pass” recommendation; the Division of Medicaid is required by the committee language to deliver multiple status and program reports to JFAC by the dates cited in the packet.