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DLS warns of data gaps and $175 million projected shortfall in Behavioral Health Medicaid budget
Summary
Department of Legislative Services told the Health and Social Services Subcommittee that Maryland's Behavioral Health Administration faces uncertain utilization data because of an administrative services organization transition, and projected Medicaid shortfalls of about $125M (current year) and $175M (FY27). MDH said vetted ASO data and program adjustments will clarify projections.
Naomi Camaro of the Department of Legislative Services told the Health and Social Services Subcommittee on March 4 that the Behavioral Health Administration's FY27 budget totals $3.9 billion, a roughly 3.8% decrease from the prior year, and that the agency faces both data-quality problems following an ASO transition and sizable projected shortfalls in Medicaid provider reimbursements.
Camaro said the Department of Legislative Services (DLS) is projecting a roughly $125 million shortfall in the current fiscal year and about $175 million in FY27 for the Behavioral Health Medicaid program. She said those projections reflect DLS's higher utilization assumptions compared with assumptions used to build the budget and several reconciliation items learned after the budget submission.
DLS highlighted that key utilization and MOUD (medication for opioid use disorder) measures are missing for FY25 due to incomplete data transfers following the switch to a new administrative services organization (ASO). "These data measures are missing for fiscal 2025 due to some ongoing data transfer issues with the new ASO," Camaro said, and DLS recommended restricting some funds pending monthly non-Medicaid provider reimbursement data.
Acting Deputy Secretary Rachel Talley and MDH officials told the panel that they are working with Carillon to vet and map claims data and that validated ASO-era data will be incorporated into the Department of Health's managing-for-results submissions. Talley said an interim MOUD percentage based on paid claims through Dec. 31, 2024, is 26.4% for the first half of FY25 and that MDH expects to provide updated, vetted indicators after the data-cleanup process is complete.
The exchange underscored the tension between DLS's budget projections and MDH's expectation that corrected ASO data will alter utilization estimates. DLS recommended committee narrative and reporting on the ASO transition; MDH said it concurs with monitoring but opposed a small, vacancy-related reduction recommended by DLS. MDH also confirmed a $45 million FY25 reclassification relates to services reimbursed through the ASO and explained it was a labeling/misalignment issue rather than an "ASO provider forgiveness" adjustment.
What happens next: DLS recommended restrictions tied to the submission of monthly non-Medicaid provider reimbursement data and additional committee narrative on the ASO transition; MDH said it will continue vetting data with Carillon and update budget documents once the vetted data are available.
