JFAC approves Medicaid supplementals and FY2026 enhancements, including hospital assessment and MMIS funding

The Joint Finance-Appropriations Committee approved a package of supplemental and ongoing appropriations for the Division of Medicaid within the Department of Health and Welfare, including $113.8 million to cover an updated Medicaid forecast, $108.8 million for an Idaho Behavioral Health Plan capitation rate increase, and $77.24 million in dedicated hospital assessment deposits needed to draw additional federal funds.

Why it matters: The committee’s action funds shortfalls and planned program changes for Medicaid that affect hospitals, managed-care organizations, behavioral-health providers and people served by Medicaid. Several items respond to federal requirements (external quality review, CAHPS surveys) or court and legislative mandates (a DD resource-allocation tool tied to litigation and trailer language implementing House Bill 345). The committee also approved reporting and contract-timing language that sets deadlines for future oversight.

Alex Williamson, budget and policy analyst with Legislative Services, outlined the FY2025 supplementals to the committee and described the requests as a mix of federal requirements, implementation costs and updated forecasts. Williamson said the managed-care external quality review (EQR) is a federal requirement and that Idaho’s four managed-care plans need $1.35 million (one time) to meet that obligation. Williamson described other FY2025 requests as payments for implementation costs tied to the July go-live of the Idaho Behavioral Health Plan and residual entitlement costs the division now projects for the final months of FY2025.

The committee approved the FY2025 supplemental package as a single collective motion. Senator Wintrow moved the FY2025 supplemental motion and Representative Handy seconded it. The committee recorded the vote counts: Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused. The motion passed and will advance as a bill with a new pass recommendation.

The committee then considered FY2026 enhancements and ongoing adjustments. Williamson walked through several items on page 2 of the staff packet, including:

- Hospital assessment fund (ongoing): funding to make the hospital assessment appropriation ongoing so hospitals can transmit assessments to a dedicated account and the state can draw additional federal matching funds under an updated upper-payment-limit methodology. The dedicated deposit shown was $77,243,700 (FY2025 one-time), and the FY2026 ongoing package included the related ongoing appropriation.

- CAHPS survey contract (ongoing): federal requirements added two new CAHPS surveys in 2024; the division requested $67,600 ongoing to cover both surveys.

- Adult DD resource-allocation model (ongoing): $200,000 ongoing tied to a court settlement (the transcript referenced the "KW" lawsuit) to support an assessment tool required by the settlement and to pay court-ordered attorney fees.

- Actuary contract amendment: an additional $1.1 million (split roughly half federal/half general) to expand actuarial services. Williamson explained the division currently relies on external actuarial firms for capitation-rate work, forecasting and risk evaluation.

- MMIS procurement: additional authority to draw on funds already set aside in the dedicated MMIS fund as the multi-year Medicaid Management Information System replacement proceeds through incremental deliverables.

- Population-forecast adjustments: a net $376,124,900 adjustment to account for FMAP changes and updated caseload, utilization and pricing expectations for FY2026 (splits shown in the packet: approximately $70.8 million general fund and $305.2 million federal funds).

Representative Furness moved the FY2026 program-maintenance package and Senator Burkey seconded the motion. Committee discussion noted the roughly 11.5% increase in the Medicaid budget in this package, driven largely by utilization, provider payment increases and the hospital assessment program. Speakers emphasized several items are federally or judicially required and that some line items (MMIS fund, hospital assessment deposits) represent money already set aside or required to access federal matching funds. Senator Cook stressed the importance of actuarial work for program soundness. Several lawmakers also noted that savings tied to House Bill 345 are contingent on obtaining federal waivers.

The committee approved the FY2026 package; recorded totals were Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused. The motion will also advance as a bill with a new pass recommendation.

The committee then adopted draft trailer language associated with the budget package by unanimous consent. Key language added to the appropriation bill included: a requirement that the Division of Medicaid explore value-based payment models for outpatient addiction treatment and report findings to JFAC by Jan. 15, 2026; direction to align Medicaid contract periods with the state fiscal year and report progress to JFAC by Jan. 15, 2026; a requirement for an annual emergency Medicaid report (clients served and total expenditures) to JFAC following each fiscal year but no later than Sept. 15; and standard federal-funding restriction language.

Votes at a glance: FY2025 Medicaid supplementals (collective motion moved by Senator Wintrow; seconded by Representative Handy) — Outcome: Passed. Tally: Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused. Total ayes 13, nays 6. FY2026 Medicaid program maintenance/enhancements (motion moved by Representative Furness; seconded by Senator Burkey) — Outcome: Passed. Tally: Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused. Total ayes 13, nays 6. Adoption of trailer language (unanimous consent) — Outcome: Passed unanimously; no recorded roll call dissent.

What’s next: The approved motions will be carried forward as bills with pass recommendations. The new reporting deadlines in the trailer language create follow-up reporting to JFAC (Jan. 15, 2026 and Sept. 15 annually). Lawmakers directed staff and workgroups to continue technical and implementation work in follow-up sessions.

Quotes used in this report come from committee proceedings and are attributed only to speakers recorded in the transcript.