JFAC hears requests to access delayed federal IBHP funds, department asks for transfer exemptions

The Joint Finance-Appropriations Committee on Feb. 1 heard a presentation on the Division of Mental Health Services within the Department of Health and Welfare, including a supplemental request to allow the agency to access federal grants connected to the Idaho Behavioral Health Plan (IBHP) and a related request for exemptions to statutory program-transfer limits.

Analysts said the agency seeks a fiscal-year-2025 one-time federal appropriation of $6,700,000 to draw down federal grant money that was awarded after the IBHP went live in July 2024 but that the state lacks current appropriation authority to access. The agency also requested $261,400 in ongoing federal authority for operating costs tied to grants from the Substance Abuse and Mental Health Services Administration (SAMHSA).

The request comes as staff described prior appropriations that increased community behavioral health capacity, including a $6,000,000 ongoing enhancement for community behavioral health clinics and several one-time increases (including $3,000,000 for community mental health and $4,400,000 to support the 988 crisis line). Alex Williamson, a Legislative Services Office analyst, said the division's FTP count was adjusted this cycle: "After the base adjustments that this committee took action on, there are 278.23 FTP associated with this division now," down from the prior slide that showed about 305 FTP.

Why the appropriation is needed

Williamson told the committee federal grants issued around the IBHP's July 2024 go-live were originally appropriated for fiscal 2022 and the agency no longer has authority under those old lines to spend the awards. The one-time request would give the department the appropriation authority to access those federal dollars.

Department response and legal challenges

Alex Adams, director of the Department of Health and Welfare, told the committee that the procurement and implementation of IBHP preceded his tenure and that "this was, I believe, 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." He also said there were legal delays: "I also believe there was about a year in legal challenges that delayed it as well." Senator Cook pressed on the procurement delays and the potential cost of waiting; Adams repeated that legal challenges are outside the department's control and that once resolved the department prioritized careful implementation.

Transfer-exemption request

The department additionally asked the committee for an exemption to the 10% program-transfer limitation in Idaho Code —7-35-11 for fiscal 2025 to allow broader transfers into adult and children's mental health programs. The governor's recommendation would also remove transfer limitations beyond those already established in statute for 2026, the analyst said. Adams explained the practical reason: because some behavioral-health services are not statutory entitlements and some are, the department faces operational constraints when costs shift. He warned that without broader transfer authority the agency may need to take actions such as temporarily suspending some nonentitlement services.

"We had to temporarily suspend children's mental health services," Adams said, describing earlier actions the department took to live within budget when authority to move funds did not exist.

Committee context and next steps

Committee members asked how long procurement and implementation took and whether the department should bring the procurement office in for more detail; director Adams said the department could provide additional background. Senators also asked for budget projections tied to the IBHP and for Medicaid staff to appear in upcoming hearings, since behavioral health services for Medicaid-eligible patients are budgeted in Medicaid. Williamson and Adams indicated the IBHP contract and its budget implications will be topics in the Medicaid hearing scheduled later in the session.

Ending

The department's requests will be considered as the committee reviews the behavioral-health enhancement appropriation. Analysts noted several prior-year appropriations and one-time grants that have reshaped the division's base, and committee members pressed the department to provide more detail on procurement timing, the federal grants at issue, and the consequences of the requested transfer authority.