Division 3 work session reviews HB2 line items for DHHS: shelters, opioid abatement, WIC, Medicaid and program suspensions

Division 3 of the House Finance Committee spent most of the session reviewing House Bill 2 sections affecting the Department of Health and Human Services (DHHS), asking department staff for clarifications and flagging several items for further committee work.

Opioid abatement and shelter funding: Nathan White, DHHS chief financial officer, explained that the governors HB2 proposal shifts funding for shelter services to the opioid abatement trust fund. Section 85 in HB2 would provide $10,000,000 from opioid abatement dollars across the biennium (two $5,000,000 allocations) and supplement an earlier prioritized needs request the department made; White said this action "maintains the status quo" for shelter funding and noted existing contracts fund roughly 934 contracted shelter beds. Committee members pressed whether opioid abatement funds are restricted to opioid-response activities; Katia Fox, Division for Behavioral Health director, deferred legal scope questions to the attorney generals office while noting the state had renewed a public-health emergency for opioids.

Program suspensions and lapses: Members reviewed multiple suspended programs that would require new general-fund appropriations if restored, including graduate medical education and catastrophic hospital aid (both long suspended); White said reinstating those programs would require general funds. The committee also considered extending effective dates or lapse dates for ongoing programs: WIC farmers-market program funds from a 2023 appropriation (about $600,000 total) were delayed because rulemaking slowed implementation; a proposal would carry those funds forward so they would not lapse until June 30, 2027. A small DD pilot (an earlier $2.8 million appropriation) currently serving 7 or 8 individuals would be carried forward to avoid terminating services mid-course.

Medicaid-to-schools and federal claiming: Members examined section 91, which permits the department to accept additional federal Medicaid-to-schools funds with fiscal-committee approval rather than going through additional G&C review. White said the language allows accepting higher federal revenue into accounting unit 7207 and that the change had not yet been used in recent years; members discussed whether the provision should avoid both G&C and fiscal review and whether to add a contingency clause tied to parental consent rules.

Gifts, classification and staffing changes: The committee reviewed a proposed change allowing DHHS to accept larger gifts and to distribute them based on departmental needs; members discussed increasing the statutory cap from $1,000 to a higher ceiling (amendments under consideration would raise it to $250,000 and allow earmarks consistent with donor intent). Other housekeeping items included converting some classified positions to unclassified status and repealing a dated statutory reference to a "mental health medical supervisor" that the department said no longer existed in practice.

Court-appointed counsel and children in residential care: Committee members revisited extension language for delayed implementation of legislation that would provide court-appointed counsel in certain institutionalization proceedings (SP463 from 2024). DHHS and DCYF representatives said implementing the full statutory requirements would require additional attorneys and staff (estimates cited roughly $391,000 general funds in a partial first year and around $407,000 the following year for additional DCYF attorneys and support). Committee members recalled prior work on a phased approach and asked for more cost information and implementation options before acting.

Medicaid policy changes: The committee discussed items that the governor scored as savings in HB2: allowing Medicaid reimbursement to capture net cost savings where brand-name drug rebates make brand reimbursement cheaper than generics; modest increases in prescription co-pays (from $1$2 to $4) and filing Medicaid rates annually instead of twice. The governors proposal also includes language to allow premiums in the Granite Advantage program (states Medicaid expansion variant) for certain income bands and potential CHIP-related premium language; Representative Telerski indicated she planned amendments to remove or clarify premium provisions and raise concerns about administrative complexity and uncompensated-care burdens on providers.

County cap and other technical items: The committee confirmed HB2 language that updates the county cap calculation per RSA 167:18-a and noted the statutory $5,000,000 credit that affects the accounting presentation across HB1/HB2 pages.

Next steps: Members agreed to continue many of these items in the coming days: the committee will meet again (formal executive session planned before the full finance committee action) to consider amendments and revised business-case materials from DHHS and other program offices. Several members asked the department to provide more granular fiscal notes, implementation timelines and options for staggered or phased implementations where staffing costs and service continuity are at issue.