{"id":374916,"date":"2025-12-28T23:14:28","date_gmt":"2025-12-28T23:14:28","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/374916\/"},"modified":"2025-12-28T23:14:28","modified_gmt":"2025-12-28T23:14:28","slug":"idaho-isnt-sure-mental-health-cuts-will-save-money-long-term-medicaid-director-says","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/374916\/","title":{"rendered":"Idaho isn\u2019t sure mental health cuts will save money long-term, Medicaid director says"},"content":{"rendered":"\n

REXBURG (Idaho Capital Sun<\/a>) \u2014 Idaho health officials aren\u2019t sure that a Medicaid contractor\u2019s cuts to critical mental health services will end up saving the state money in the long run.<\/p>\n

But because Idaho Gov. Brad Little ordered budget cuts across state government to try to avoid a projected budget shortfall<\/a> \u2014 which is now estimated at $40.3 million this fiscal year, even after his cuts \u2014 the mental health cuts were needed to avoid other damaging holdbacks, Idaho\u2019s top Medicaid official recently said in a federal lawsuit filing.\u00a0<\/p>\n

If the Department of Health and Welfare were required by a court to pause cuts to specialized mobile teams that treat people with severe mental illness, Idaho Medicaid Deputy Director Sasha O\u2019Connell wrote the agency \u201cwill be forced\u201d to look at other cuts.<\/p>\n

RELATED | Idaho sheriffs worry Medicaid mental health cuts pose \u2018significant public-safety concern\u2019<\/a><\/p>\n

That would include \u201cmore cuts for state run psychiatric hospitals; cuts to payment rates for private behavioral health hospitals, which would risk those private hospital(s) pulling out of participation in the Medicaid program; eliminating youth and adult mental health crisis centers and mobile crisis units; and cuts to other optional services,\u201d she wrote in a declaration in response to a lawsuit by patients in federal court<\/a>.\u00a0<\/p>\n

Even with the state\u2019s cuts to the mental health services for people with severe illness \u2014 which state officials argue still exists somewhat \u2014 \u201cthese changes may not be avoidable,\u201d O\u2019Connell wrote.<\/p>\n

The state\u2019s explanations come weeks after the cuts<\/a> by contractor Magellan Healthcare to services for people with severe mental illness took effect. Mental health providers and sheriffs warn they will risk public safety<\/a>.\u00a0<\/p>\n

Idaho Sen. Julie VanOrden, a Republican from Pingree who chairs the Senate Health and Welfare Committee, said there\u2019s preliminary talks to restore funding to cut programs, possibly by tapping into funds from settlements of lawsuits against tobacco and opioid manufacturers.\u00a0<\/p>\n

She hopes that pans out, because other funding options are slim.<\/p>\n

\u201cWill the Legislature be willing to look at maybe using some of our \u2018rainy day\u2019 funds? Possibly, but it\u2019s going to be very slim, if we even go in and do that at all,\u201d she told the Idaho Capital Sun in an interview.\u00a0<\/p>\n

RELATED | Idaho mental health clinics sue state over Medicaid contractor\u2019s cuts<\/a><\/p>\n

Idaho faces another lawsuit over Medicaid mental health cut<\/a> <\/p>\n

\"Idaho<\/a>Idaho legislators on the Medicaid Review Panel listen to public testimony during a meeting Dec. 15, 2025, in Rexburg. From left to right: Sen. Kevin Cook, co-chair Sen. Julie VanOrden, and co-chair Rep. John Vander Woude. | Kyle Pfannenstiel, Idaho Capital Sun A Republican legislator grilled Medicaid official on lacking data for the cuts <\/p>\n

Weeks before the Idaho Legislature will reconvene for the 2026 legislative session, a panel of lawmakers stopped in Rexburg to meet with Medicaid providers for their feedback on the state\u2019s transition to private companies running Medicaid benefits, which is called managed care.<\/p>\n

But before the Legislature\u2019s Medicaid Review Panel<\/a> heard from providers, Idaho Sen. Kevin Cook, an Idaho Falls Republican, pressed for more details on the Medicaid mental health cuts.\u00a0<\/p>\n

Idaho legislators on the Medicaid Review Panel listen to public testimony during a meeting Dec. 15, 2025, in Rexburg. From left to right: Sen. Kevin Cook, co-chair Sen. Julie VanOrden, and co-chair Rep. John Vander Woude. (Photo by Kyle Pfannenstiel\/Idaho Capital Sun) <\/p>\n

The agency doesn\u2019t have data to show the cuts will save costs long term, O\u2019Connell, the state\u2019s Medicaid director, told him. The programs themselves save money in other states, she said.\u00a0<\/p>\n

\u201cThe department has seen some evidence in other states that suggest that both of those services lead to decreased costs in the long run for the state,\u201d O\u2019Connell told him. \u201cBut given the timeline that we have to pursue budget reductions and the limited choices that we have in the law today, those were the ones that were chosen.\u201d<\/p>\n

\u201cI\u2019m assuming you have data that explains that we cut this, and we will save money,\u201d Cook said.<\/p>\n

\u201cNo,\u201d O\u2019Connell replied.\u00a0<\/p>\n

The agency needs data, Cook replied.\u00a0<\/p>\n

\u201cIf we don\u2019t have data that proves that our cuts are saving us money, that it possibly costs us more down the road, how on earth can we say I\u2019ve got data to show that an (managed care organization) can come in and give us a good bid and take over all of our programs?\u201d Cook said.\u00a0<\/p>\n

When providers spoke later in the meeting about the cuts, Sen. VanOrden, the panel\u2019s co-chair, cut them off. She said the meeting was about the state\u2019s shift to managed care, not the cuts.\u00a0<\/p>\n

Ric Boyce, who directs Mental Health Specialists in Pocatello and Blackfoot, was less than a minute into talking before he brought up the cuts \u2014 saying they have \u201calready highlighted the vulnerabilities\u201d of managed care.<\/p>\n

After VanOrden told him the panel wasn\u2019t discussing cuts at the meeting, Boyce kept trying.<\/p>\n

\u201cI don\u2019t think we can talk about how I\u2019d ever implement this without having some understanding of what\u2019s just happened,\u201d he said.\u00a0<\/p>\n

RELATED | Hundreds rally in Idaho Falls demanding better mental health services<\/a><\/p>\n

Providers, sheriffs worry the public faces safety risk from Idaho mental health cuts\u00a0 <\/p>\n

The day before Thanksgiving, staff in Boyce\u2019s office called patients to tell them the services \u2014 the Assertive Community Treatment, or ACT, program for people with severe mental illness, and peer support specialists that aid people throughout treatment \u2014 would no longer be available, he told the Idaho Capital Sun in an interview.<\/p>\n

\u201cWe were scrambling to try and get hold of these guys to reassure them that we were not cutting them off,\u201d Boyce said. \u201cWe were still going to do everything we could on our end to try to see them. But all of a sudden we had a whole bunch of people in crisis.\u201d<\/p>\n

State officials and Magellan say the services in the program are still available individually even though the cuts don\u2019t let providers bill for them together in one \u201cbundled\u201d service. But already, Boyce said he\u2019s had staff quit or cut hours.\u00a0<\/p>\n

\u201cThe community is being told that the components of the programs are still there. But at the same time, they\u2019re no longer the evidence-based programs at all,\u201d he said.<\/p>\n

The day the cuts went into effect, Idaho Sheriffs\u2019 Association President Samuel Hulse warned the governor and state lawmakers<\/a> that the cuts \u2014 caused by \u201cself-inflicted\u201d budget woes \u2014 would risk public safety.<\/p>\n

Hulse, who is Bonneville County\u2019s sheriff, told the Sun it\u2019s clear that the Legislature \u201ccut deep enough that they now have a problem.\u201d<\/p>\n

Sheriffs run the jails, which he said \u201care the default mental institutions of the nation.\u201d<\/p>\n

\u201cSome individuals, a small percentage, need to be kept incarcerated because we can\u2019t stabilize them. But that\u2019s a very small percentage of people. The rest, with effective services, can be kept stabilized. The sheriffs know this because we live it every day,\u201d he said. \u201c\u2026 When you don\u2019t have the other services provided in the community, we know they default into the justice system.\u201d<\/p>\n

\"Idaho<\/a>Idaho Medicaid Deputy Director Sasha O\u2019Connell presents to the Legislature\u2019s Medicaid Review Panel in Rexburg on Dec. 15, 2025. | Kyle Pfannenstiel, Idaho Capital Sun Idaho Medicaid has few options for cuts, official says <\/p>\n

About 200 people in Idaho are on the Assertive Community Treatment, or ACT, program, Magellan Healthcare\u2019s Idaho Executive Director David Welsh wrote in a declaration in response to a federal lawsuit by patients.\u00a0<\/p>\n

Before the governor\u2019s executive order for budget cuts in response to the projected budget shortfall, Magellan \u201chad already received communications from the state\u2019s private behavioral health hospitals indicating that they would pull out of the network or significantly reduce the amount of Medicaid members they serve absent a rate increase, effectively refusing Medicaid participants if Magellan decreased their reimbursement rates,\u201d Welsh said.<\/p>\n

Idaho Medicaid Deputy Director Sasha O\u2019Connell presents to the Legislature\u2019s Medicaid Review Panel in Rexburg on Dec. 15, 2025. (Photo by Kyle Pfannenstiel\/Idaho Capital Sun) <\/p>\n

Then after the governor\u2019s executive order, he wrote that the Department of Health and Welfare \u201crequested that Magellan identify services that could be reduced to achieve a 4% net reduction.\u201d<\/p>\n

His declaration didn\u2019t address why specific services were targeted for cuts. The company also cut mental health provider pay rates<\/a> by 4-15% that vary by service, after the Department of Health and Welfare cut pay rates<\/a> for providers and managed care organizations by 4%.\u00a0<\/p>\n

But the state Medicaid director, O\u2019Connell, wrote that if the agency doesn\u2019t proceed with its plans for cuts, it \u201cmust consider eliminating more optional Medicaid covered services.\u201d And it has few options of programs to cut under current law, she wrote in the legal filing.<\/p>\n

Heading into the next legislative session, VanOrden is worried about the state\u2019s budget situation.\u00a0<\/p>\n

\u201cI\u2019m nervous about it this year, but I\u2019m even more nervous about it next year,\u201d she said, when the budget deficit is projected to grow to more than a half billion dollars.\u00a0<\/a><\/p>\n

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