This week, lawmakers from two crucial committees are scheduled to conduct initial votes on significant funding proposals for Montana’s health department. As the largest state agency, this department is responsible for managing vital services such as the state psychiatric hospital, child welfare services, state Medicaid programs, and various other crucial functions.
In total, the Department of Public Health and Human Services is requesting a more than $7 billion allocation over the next two years, according to Gov. Greg Gianforte’s executive request released in November, a roughly 17% increase in funds over the current budget cycle. On the first day of the Legislature’s health and human services budget subcommittee, chair and Rep. Bob Keenan, R-Bigfork described navigating the agency’s requests as an “awesome $7 billion worth of responsibilities.”
While many of those requests are expected to filter through Keenan’s committee and eventually appear in House Bill 2, the state’s primary budget bill, others dealing with long-term infrastructure and technology needs will be included in House Bill 5 and House Bill 10.
Lawmakers in charge of the respective appropriations committees will start progressing the budget requests of the Gianforte administration in the coming weeks, either advancing those they agree with or modifying the proposals they find less favorable.
MEDICAID PROVIDER RATES
With more than 300,000 Montanans on Medicaid, the state’s reimbursement rates for medical providers that accept that public insurance are a critical cornerstone of the state’s health care industry. A state-commissioned study released in 2022 found that Montana’s reimbursement rates are significantly lower than the standard cost of providing those services, validating long-standing complaints from mental health, addiction treatment and disability service providers and senior and long-term care institutions that say the current rates hamstring their ability to provide services.
Across all divisions, the Gianforte administration’s health department budget proposes $243.6 million in new spending over the biennium to boost provider rates. That mix of state and federal funds would break down to a roughly 16% increase in rates during the first budget year, dropping to about 10% the year after.
Health department Director Charlie Brereton has described the rate increases as “historic,” although they would not completely bridge the gap between current and benchmark standards outlined in the 2022 study. In the first year of the biennium, the governor’s budget would address 58% of the difference, followed by 36% in the subsequent year.
Coy Jones, a consultant from Guidehouse, the organization responsible for the reimbursement study, informed lawmakers on the budget committee that the initial year’s rise in funding would function as a “temporary stabilizing increase” for the troubled industry.
Jones stated that, in numerous instances, the benchmarks surpass the existing rates by a substantial margin.
Some Republican and Democratic lawmakers, including Keenan and one of the committee’s vice chairs, Rep. Mary Caferro, D-Helena, have said the department’s proposed rates are insufficient in light of provider needs, setting the stage for a possible divergence between lawmakers and the department this week.
In a Monday interview, Caferro expressed, “The rope measures 10 feet for a hole that spans 20 feet. Astonishingly, despite investing millions of dollars in the study, they are disregarding its findings.”
INFRASTRUCTURE AND BEHAVIORAL HEALTH SYSTEMS
The health department has also requested multimillion dollar investments in brick and mortar institutions, including the state psychiatric hospital in Warm Springs, veterans homes, and the Montana Mental Health Nursing Care Center in Lewistown.
In total, $29 million in HB 5 spending would go toward facility roof replacements, wastewater treatment system repairs, finishing covered walkways at the Southwest Montana Veterans Home in Butte, and other physical upgrades. Some of those allocations would go toward finishing existing projects and renovations that state employees have testified foundered over the last two years while inflation surged. Roughly $16 million would help fund upgrade and “deferred maintenance” at the state hospital in an effort to seek federal recertification, which authorities pulled in 2022 citing patient safety hazards.
In a February meeting with lawmakers from both the health and infrastructure budget committees, Brereton explained that our objective is to tackle long-standing capital challenges and issues.
The department’s infrastructure plans were met with a lukewarm reception in other areas.
Lawmakers questioned Brereton regarding the health department’s estimated cost of the proposal, which amounts to $113 million. The proposal aims to alleviate the strain on the Warm Springs hospital by establishing two behavioral health facilities in different areas of the state. The health department plans to outsource the clinical management and operations of these facilities and may either acquire new buildings or repurpose existing ones. However, there are no details provided regarding the specific locations or management entities for the facilities.
In my opinion, there is a significant issue with your credibility, particularly within the long-range planning committee. The members of this committee consist of experienced businessmen and women, and I don’t believe anyone is convinced that the price you are suggesting for these facilities is even remotely reasonable. It lacks realism entirely.
Rep. John Fitzpatrick, R-Anaconda
“I think you’ve got a real credibility problem, at least on . The folks on that committee are businessmen and women and I don’t think anybody’s convinced that the price that you’re proposing here for these facilities is anywhere in the ballpark, it’s not realistic whatsoever,” said Rep. John Fitzpatrick, R-Anaconda.
During a Monday statement, Keenan suggested that if lawmakers approve significant funds for the department’s behavioral health system expansion, there will be talks about establishing an oversight committee consisting of legislators and department representatives. However, it should be noted that no bill has been presented to establish such a committee at this time.
As the funding bills progress through the Legislature, lawmakers will have multiple opportunities to make adjustments, additions, removals, or other significant changes to departmental appropriations following the advancement of budget priorities by each committee.
According to Keenan, the health department’s budget committee has set a schedule to vote on the department’s list of proposals on Wednesday and Thursday morning.
