BOISE, ID – The private company that runs Idaho Medicaid’s mental health benefits is planning to cut critical services for people with severe mental illness.

The latest round of cuts by Magellan of Idaho would affect peer support specialists who help people navigate mental health treatment, and specialized mobile teams that treat patients with severe mental illness who have struggled in routine treatment settings. The cuts, which call to end the services on Dec. 1, stem from the state’s attempts to avoid a projected budget shortfall.

Mental health providers worry the cuts could spur more violent critical incidents as people with severe mental health issues lose accessible treatment, said Laura Scuri, who co-owns Access Behavioral Health Services in Boise and leads the Idaho Association of Community Providers’ behavioral health subgroup.

“We don’t see that with people who are in treatment, any even low-level treatment,” Scuri told the Idaho Capital Sun in an interview. “It’s the people who are not in treatment, who cannot engage in treatment. Those are the people that eventually become so psychotic that they engage and there’s a critical incident for the community.”

Program cuts come as state attempts to avoid projected budget shortfall

After the Idaho Department of Health and Welfare cut pay rates by 4% for Medicaid medical providers and for private companies that run Medicaid benefits, which are called managed care organizations, Magellan announced plans to cut pay rates for Medicaid mental health services by 4-15%.

In a statement, Magellan Health spokesperson Kristen Durocher said the contractor doesn’t have many options for cuts.

“Magellan understands and supports the State of Idaho in carrying out actions required to balance the state budget as required by the Idaho Constitution,” she said. “Given the limited available levers to reach budget targets, Magellan has worked with (the Idaho Department of Health and Welfare) to identify changes to optional programs that are allowable under the law. We will continue to partner with the state, providers, and members as we all navigate the changes before us.”

For the past two months, Health and Welfare has been working with managed care organizations to find ways to cut spending in their contracts, agency spokesperson AJ McWhorter said in a statement.

“The department and Magellan agree that there are no easy options to achieve the needed budget reductions,” he said.

The state is planning to extend 4% Medicaid provider pay rate cuts for another year — after Idaho Gov. Brad Little permanently extended budget cuts.

Even after the cuts, budget estimates released last week show the state is still on track to end this fiscal year in June 2026 with a $58.3 million budget deficit, the Idaho Capital Sun reported. Idaho’s revenues have dwindled the first few months of this fiscal year, months after the Legislature and Gov. Little approved $450 million in tax cuts.

The programs are likely being cut because there’s many services that Magellan “legally can’t touch,” Scuri said.

“We have a constitutional requirement to balance that budget. And they walked out of there without that budget balanced last year. And this is the result of that,” she said.

What are the programs being cut?

One of the services Magellan is cutting is a program to treat patients with persistent, severe mental health issues who have struggled in traditional treatment options.

Through the program, called Assertive Community Treatment, doctors and nurses visit patients in their homes to help them stay on medication. By cutting the program, the state is shifting costs to jails and psychiatric hospitals, which are more expensive, said Tom Tueller, clinical director for Tueller Counseling Service in eastern Idaho, which runs a local team of providers on the program.

About 400 to 500 people across the state are on the program, he said. Many of them will end up homeless if the program ends, he said.

“It might cut the pot of money for the (Department of) Health and Welfare. But it’s going to add huge amounts of money to the hospitals and the jail systems, because that’s where these people are going to end up,” he told the Idaho Capital Sun in an interview.

It could also risk more violent episodes in the community, Tueller said.

In 2010, the man accused of shooting Ryan Mitchell in Pocatello was receiving treatment through the program — until it faced cuts, Tueller said.

Mitchell was visiting a local coffee shop when a 54-year-old man with schizophrenia shot him at point-blank range in the back, the Inlander reported.

Mitchell survived, with several severe medical complications. A month later, he asked political candidates at a public forum why he got shot, the weekly newspaper reported.

“The fact of the matter is this was caused by recent budget cuts to our mental health program. My question is … What are you going to do to fix it?” Mitchell said, according to the Inlander.

With Magellan’s move to end the program, Tuller said “we’re going to have more victims out there like Ryan Mitchell.”

Magellan also plans to cut peer support services, a program in which people recovering from mental illness help support people throughout treatment.

Executive Director of the National Alliance on Mental Illness Idaho Beth Markley said the cuts will be devastating.

In rural areas, she said some of the state’s hundreds of peer support specialists drive hundreds of miles each month to meet people.

“There’s just no replacement for the service,” Markley said in an interview. “I feel very strongly that this is like somebody just went down a spreadsheet and started crossing lines off until they got to the required cuts — and didn’t take a look at like, ‘What is the most efficient use of taxpayer money for the results that you get?’”

Some substance abuse rehabilitation providers are also facing a cut from Magellan: They can’t do programming in the same buildings they offer sober housing in.

The cuts — on top of the recent pay cuts announced earlier — are unlike anything providers have seen, said Jason Coombs, founder of Brick House Recovery, a substance abuse treatment center in Boise and Idaho Falls.

“Our rates are going down, the cost of hiring and salaries is going up. And it’s scary times. I wouldn’t be surprised to see some treatment providers fold up, and minimizing access to care over these changes,” Coombs said.

This story first appeared on Idaho Capital Sun.