MCOs (ID) – Idaho looks at farming out Medicaid

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[MM Curator Summary]: The Medicaid Managed Care Task Force has one job- make sure the state moves to managed care.



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Task force mulls using third party to administer benefits in hopes of cutting costs


Julie VanOrden


FILE – Health and Human Services Secretary Xavier Becerra speaks during a meeting with a task force on reproductive health care access in the Roosevelt Room of the White House, April 12, 2023, in Washington.

Evan Vucci

BOISE — The Idaho Legislature’s Medicaid Managed Care Task Force discussed the program’s growing budget, how it could contract with a managed care organization, and challenges faced by the division at its first meeting Monday.

The task force was created to look at how potentially implementing managed care — or contracting with a third party to administer and oversee Medicaid benefits — could reduce costs in the program. The group is required to report its findings by Jan. 31, 2024, with potential policy recommendations.

One of the dominating debates of the 2023 legislative session was the ballooning price tag of Medicaid over the last couple of years; this year’s budget came in at $4.5 billion, which some lawmakers were concerned wouldn’t fully pay some of the bills.

The task force, which met in the state Capitol on Monday morning, is co-chaired by the House and Senate Health and Welfare Committee chairpersons, Rep. John Vander Woude, R–Nampa; and Sen. Julie VanOrden, R-Pingree. Its Senate members are Sens. Mark Harris, R-Soda Springs; Kevin Cook, R-Idaho Falls; Glenneda Zuiderveld, R-Twin Falls; and Senate Minority Leader Melissa Wintrow, D-Boise.

The task force’s House members are Reps. Dori Healey, R-Boise; Jordan Redman, R-Coeur d’Alene; Josh Tanner, R-Eagle; and Rep. Nate Roberts, D-Pocatello.

“I think it’s one of the major projects we’re going to deal with this summer,” Vander Woude said.

One of the ideas that came up repeatedly in discussions over the course of the session involved switching to managed care for more Medicaid patients. Managed care is a system meant to manage cost, utilization and quality of care, according to


If Idaho’s Division of Medicaid were to move forward with implementing managed care for more of its patients — Medicaid dental care is currently provided through a managed care plan — it would need to seek a contractor to deliver these services.

State Purchasing Manager Chelsea Robilard provided task force members with a detailed explanation of the procurement requirements for finding and contracting with a managed care organization.

Because of the size of the program and its complexity, the process would likely take a long time and the Division of Purchasing would probably need one more full-time employee, she said. Division of Medicaid Administrator Juliet Charron estimated it would take around two years to complete if the Legislature decided to switch from its current system, which is called value-based care and is a reimbursement system that ties payments made to providers to the quality of the care provided and incentivizes efficiency and effectiveness, according to the Department of Health and Welfare website.


Division of Financial Management Administrator Alex Adams provided information about Medicaid’s impact on the state budget, which is significant. Medicaid costs make up the majority of total spending in every state, he said.

This hasn’t always been the case, and nationally and in Idaho, the spending for the program has raised steadily since 2018, driven by more people becoming eligible when states opted into Medicaid expansion and higher costs of services.

Idaho Medicaid is paid primarily through federal funds. In the $4.5 billion fiscal year 2024 appropriation for the program, around $3 million were federal funds. The budget included about $856 million in state general funds and nearly $676 million in dedicated funds.

When looking at all state spending — general, dedicated and federal included — Medicaid makes up 34% of the budget, and public schools, the next largest expenditure, is 24% of spending, Adams said.

Adams highlighted the potential challenges in setting the fiscal year 2025 budget, including that federal pandemic relief funds will wear off and the state will go back to covering a larger share as it traditionally had, and that federal matching percentages are set to decrease because of growth in Idaho’s per capita income. Adams also said the state isn’t likely to end the year with a surplus, as it has the past couple of years, because the property tax legislation passed this session directs most surplus revenue toward property tax relief.

The Medicaid budget also comes with its own unique challenges, Adams said. Because of the nature of the program, if someone is eligible for care and receives it, the state is legally obligated to pay the bill; this makes controlling costs difficult. There are also competing interests between containing costs and providing access to quality care.

“It’s too easy to look at issues only through the lens of the budget and at the expense of patient outcomes,” Adams said.


Ryan Langrill from the state Office of Performance Evaluations (OPE) provided an overview of challenges the office found in past evaluations of Idaho’s Medicaid.

Lawmakers have tasked the office with looking into a number of programs within the division, including related to rate setting, delays in claims processing, the Idaho behavioral health plan and its non-emergency transportation.

These reports, all of which are available at, identified weaknesses within the department such as with contract management. For instance, in regard to the state’s non-emergency medical transportation contract that failed, OPE found that the division made two significant errors: The data that it made available to contractors through the request for proposals process wasn’t complete and didn’t allow them to submit a bid that reasonably reflected the services they would need to provide, and it set a spending cap that wasn’t actuarially sound and wouldn’t cover the cost of providing the services, Langrill said.

The office also has determined over the years the division struggled with benefit management and design, measuring performance adequately, adapting knowledge and skills to new policies or systems, stewardship and a shortage of staff to adequately manage programs.

One of the reports found the department wasn’t asking for enough funding to cover the rates to provide services, Langrill said.

“This led to a lot of frustration from the budget committee, where they were paying for rate increases that the Division of Medicaid told them were necessary for the program, but the rate increases were not actually sufficient to make providers whole,” Langrill said.

Wintrow said, “different ideologies about the program create tensions and budget deficits that they (the department) may not be responsible for, and some of that is on us as a Legislature.”

The office and an outside consultant hired by the state to create Medicaid cost-containment recommendations both noted that the Division of Medicaid has a “lean” staff, which can create issues.

The task force is scheduled to meet again July 10 and it will go over the long-term cost-saving measures recommended in the second report from the consultant, the firm Sellers and Dorsey. The first set of short-term recommendations were presented to lawmakers in February.

The next meetings are slated for July 25, Aug. 9 and Aug. 31.

Guido covers Idaho politics for the Lewiston Tribune, Moscow-Pullman Daily News and Idaho Press of Nampa. She may be contacted at and can be found on Twitter @EyeOnBoiseGuido.