House panel backs licensing for outpatient substance use treatment with amendment after fiscal, staffing debate

Chair Maureen Mooney, chair of House Finance Division III, convened the work session on Sept. 29 and said the panel would review retained bills including House Bill 751, which would require licensure of outpatient substance use disorder (SUD) treatment facilities and create a complaint-investigation function for the Department of Health and Human Services (DHHS) Office of the Ombudsman.

The committee adopted language that narrowed the bill's scope and reduced the fiscal impact, then voted 6-4 to recommend the bill "ought to pass as amended" to full finance.

Why it matters: Supporters said licensing outpatient providers will close oversight gaps that leave some patients exposed and create consistent quality standards. Opponents and some members flagged the cost and uncertainty about how many outpatient providers currently operate outside Medicaid or DHHS contracts, and whether the department's existing licensing bureau can absorb new responsibilities with only one additional position.

DHHS officials and advocates

Jenny O'Higgins, legislative liaison for behavioral health at DHHS, described how the bill evolved during the policy process from a separate certification program (which would have required multiple new positions and IT infrastructure) into a licensing approach that can leverage the department's existing licensing bureau. "When we worked with advocates and legislators to amend the bill, it really allowed us to build it into our existing infrastructure under licensing," O'Higgins said.

Kelly Keith, licensing unit chief, told the panel licensing can use existing processes for intake, inspection and complaint triage but noted the department does not know the precise number of outpatient providers that are not already Medicaid-enrolled or contracted with DHHS. "We know there are 46 organizations registered with Medicaid at about 76 sites," she said, and the bureau is contracted with seven SUD providers, "so there is a big difference there."

Doreen Shockley, manager of the Bureau of Licensing and Certification, told the committee that licensing fee revenue does not fully cover licensing program costs and "we would have no way to know what the shortfall would be" without more information about the number of providers.

Advocates and providers

Jake Berry, vice president of policy at New Futures, said the bill responds to oversight gaps highlighted by reporting and would protect patients and the state's larger treatment system. Joshua Caldwell, a person in long-term recovery and vice president at Brighter Day Recovery, described mixed treatment experiences he'd seen and said consistent oversight would provide a level playing field and protect people seeking care.

Amendments and committee action

Representative Gary Daniels offered an amendment that created a study committee option; Representative Greg Telerski offered two timing-focused amendments (one to delay implementation to 7/1/2027, another to fund only the second year). The committee first rejected amendment 2958-H (delay-to-2027 option) on a 5-4 vote. It then adopted amendment 2964-H, which set a path that included further study steps and reduced near-term costs; the aye-nay roll call for the final committee recommendation was: Daniels, Seaworth, (Clerk) yes; Weiler, Farrington yes; Telerski, Wallner, Raymond, Priess no; Chair Mooney yes (6-4).

DHHS said the bill as amended would require an additional compliance position and that licensing staff, clinicians and life-safety experts would handle investigations as a team rather than a single staffer working alone. The department also said the ombudsman function included in earlier versions is not needed as a separate position because licensed outpatient facilities could fall under the existing ombudsman once licensed.

What remains uncertain

Committee members pressed DHHS about: how many outpatient SUD providers operate outside Medicaid and department contracts; how much licensing fees would offset costs; and whether the department's smaller size (compared with larger states that have implemented similar regimes) would make eight FTE estimates from consultants infeasible. DHHS said reporting limitations in its legacy case systems and unknown provider numbers make precise cost estimates difficult.

Next steps

Division III recommended HB 751 "ought to pass as amended" to full finance; full finance will consider the committee's recommendation at a later date.

Ending

The committee's action sends the licensure plan forward with narrower scope and new conditions; members said they expect further budget detail and implementation planning in full finance and in communications between DHHS and the committee.