JFAC approves Medicaid FY2025 supplementals ($415.2M) and FY2026 package ($674.2M) including hospital assessment, MMIS and behavioral health funding

The Joint Finance‑Appropriations Committee on an affirmative roll call approved a package of FY2025 Medicaid supplementals totaling $415,226,800 and a FY2026 appropriations package totaling $674,192,600 that funds ongoing hospital assessment work, Medicaid forecast adjustments and several federally required contracts.

The supplemental package approved for FY2025 included funding for a managed care external quality review, configuration and implementation costs tied to the Idaho Behavioral Health Plan, an updated Medicaid forecast and a hospital assessment fund transmission to draw federal matching dollars. The FY2026 package added ongoing hospital assessment appropriations, increased funding for MMIS procurement (the Medicaid management information system), more actuarial contract funding and population‑forecast adjustments.

Why it matters: the actions enable the Department of Health and WelfareDivision of Medicaid to draw federal matching funds, meet CMS and court reporting and review requirements, and continue a multi‑year IT replacement. Committee members said failing to fund these items could interrupt federal draws, delay required surveys and slow the MMIS replacement progress.

Alex Williamson, budget and policy analyst with Legislative Services, walked the committee through the line items and described several as federal or court mandates. On the managed care review Williamson said, "This is a federal requirement." Williamson told the committee the Idaho Behavioral Health Plan went live in July and that configuration and capitation adjustments reflect higher utilization and acuity than initially projected.

Key line items described to the committee included: - Managed care external quality review: $1,350,000 (one time) to meet a CMS requirement for states with managed care organizations (Idaho has four plans). - Idaho Behavioral Health Plan system configuration changes: $695,500 (one time) and a separate capitation rate increase request of $108,821,400 (one time) to cover higher enrollment and acuity. - Medicaid updated forecast (FY2025): $113,849,300 (one time) to cover higher than anticipated enrollment and per‑member costs. - Hospital assessment supplemental (to access additional federal funds under a revised upper payment limit calculation): $190,510,600 (dedicated) in the motion for the supplemental; the state holds the assessments in a dedicated account to draw federal funds and remit them to hospitals.

On MMIS (the Medicaid management information system) Senator Cook described the committeeapproach to the multi‑year IT project: "We put the money in a fund so that all that money has already been set aside. It's in a fund sitting there," and payments are released as contractors meet milestones. Committee members said money for the MMIS state share had already been set aside in the dedicated MMIS fund and the appropriation allows the department to draw that money as tasks are completed.

Representative Furness, who asked several technical questions and moved the FY2026 package, emphasized the forecast uncertainty: "If they are overestimating, then we will get a reversion of the money next year. If they underestimate, then we'll have to do a supplemental." Legislators repeatedly described actuarial work as necessary for forecasting and rate‑setting; Williamson said the division has no in‑house actuaries and relies on contracted actuarial services for capitation rate development and risk analysis.

Members noted several items are contingent on federal actions or other approvals: the hospital assessment funding is structured to allow the state to draw federal matching dollars tied to a changed UPL (upper payment limit) calculation; the projected FY2026 impact of legislation identified as House Bill 345 depends on federal waivers and implementation details; and several reporting or survey items are federal requirements.

Committee action and recorded votes: Votes were taken by roll call. The motions passed with the committee directing the items to proceed as bills with pass recommendations.

Votes at a glance: - FY2025 Medicaid supplementals (one‑time additions as listed above): motion by Senator Wintrow; second by Representative Handy; outcome: approved (Senate: 7 ayes, 3 nays; House: 6 ayes, 3 nays, 1 absent/excused). The chair announced the motion will go forward as a bill with a new pass recommendation. - FY2026 Medicaid program maintenance/enhancements (ongoing hospital assessment, MMIS procurement, CAHPS surveys, actuary contract amendment, population forecast adjustments, and other items): motion by Representative Furness; second by Senator Burkey; outcome: approved (Senate: 7 ayes, 3 nays; House: 6 ayes, 3 nays, 1 absent/excused). The motion will go forward as a bill with a new pass recommendation.

Committee language and reporting requirements: committee members gave unanimous consent to attach budget language that directs the Division of Medicaid to: explore a value‑based payment model for outpatient addiction treatment and report to JFAC by Jan. 15, 2026; transition Medicaid contract periods to align with the state fiscal year and report progress by Jan. 15, 2026; and provide an annual emergency Medicaid report to JFAC (post fiscal year, by Sept. 15). Standard federal funding restriction and conditions language was also accepted.

Members' concerns and context: several lawmakers urged caution about staffing and implementation. Senator Wintrow noted that new reporting requirements add work for existing staff and said the committee had not added staff to perform the new reports. Multiple members described the overall increase in Medicaid spending as driven in large part by utilization and rising health‑care costs rather than new services. Representative Furness and others said House Bill 345's projected savings are contingent on waivers and additional implementation steps.

Next steps: the committee's actions will be carried forward as bills with pass recommendations and include reporting deadlines for the division. The committee adjourned and scheduled work groups and follow‑up meetings to continue budget work.