Committee on Health Budget Hearing for DISB and DBH - April 24, 2026

At-large Council Member Christina Henderson, chair of the Committee on Health, convened the second part of the FY27 budget hearings for the Department of Insurance, Securities, and Banking (DISB) and the Department of Behavioral Health (DBH) on Friday, April 24, 2026, at 9:02 AM in Room 120 of the John A. Wilson Building. The hearing focused on agency testimony and follow-up questions regarding the proposed budgets for fiscal year 2027.

Discussion Items – DISB

Commissioner Karima Woods presented DISB’s proposed FY27 budget of $35.2 million (a 0.03% decrease from FY26), supported by 157 full-time positions (three more than FY26). Highlights from the discussion include:

• IT and Public Affairs Reductions: A $319,000 decrease in IT (equipment) and a $190,000 decrease in public affairs (marketing). Commissioner Woods noted sufficient funds remain for necessary marketing.
• New FTEs: Three new revenue-generating positions: a securities licensing specialist, a financial examiner for risk finance, and a senior compliance specialist for the Compliance and Analysis Division (CAD).
• Sweep from Securities and Banking Regulatory Trust Fund: An ongoing sweep since 2019 has impacted regulatory functions; the agency requested restoration of at least a portion to maintain licensing and examination capacity.
• Office of Financial Empowerment and Education (OFEE): The FY27 budget includes a $712,000 decrease, primarily due to the closure of the Financial Empowerment Center (funded by ARPA). The center’s functions will be absorbed into other programs. The Opportunity Accounts program will see a $295,000 increase to $845,000, with additional match dollars from an FY26 supplemental.
• OIG Risk Assessment: The Office of the Inspector General rated the securities and banking trust fund as moderate risk due to infrequent policy reviews. The agency is finalizing standard operating procedures and expects to address gaps by the end of FY26.
• PrEP Coverage Mandate: DISB confirmed it has communicated the new insurance requirements for HIV prevention services (PrEP/PEP) to insurers and will review policy forms for compliance.
• Medical Loss Ratio (MLR): DISB oversees rebates; carriers are paying required rebates, especially in the large-group market where the district has limited authority.
• Captive Insurance: The agency licensed 21 new captive insurers in FY26 (total 230), contributing over $4 million annually to the general fund. Marketing efforts continue.
• Audits and Classification: An internal audit of the Opportunity Accounts program covered only FY24; the agency may consider a full program audit. On position classification, 50 of 154 FTEs have been reclassified in the last three years; the process is collaborative with DCHR.
• Public Bank Feasibility: No current plans to revisit the 2020 feasibility study; such an effort would require additional funding.

Discussion Items – DBH

Dr. Barbara Bazron, Director of DBH, presented the proposed FY27 gross operating budget of $360.5 million (including $270 million local funds) and a capital budget of $10.8 million for relocating the Comprehensive Psychiatric Emergency Program (CPEP). Key discussion points:

• Medicaid Local Match: The FY27 budget proposes $63 million for local match (including $2 million for the co-magin contract). Spending declined from $70.5 million in FY25 to $42.1 million in FY26, with $18.2 million spent to date. The reduction is attributed to policy changes limiting community support services (CSS) and fraud controls. The budget increase is conservative, pending data from the prior authorization system.
• Community Support Services (CSS): Changes include limiting CSS to 200 units (50 hours) per 180 days, restricting audio-only telemedicine, and requiring prior authorization. Monthly expenditures dropped from $27.2 million (Dec 2024) to $11.3 million (Jan 2026).
• Overtime: The agency proposed $8.2 million for overtime (down $2.2 million), but actual FY26 spending so far is $7.1 million. Most overtime is at St. Elizabeth’s Hospital and crisis services. Vacancy savings are expected to offset some costs.
• St. Elizabeth’s Hospital: The budget is $98.6 million (net reduction of $14 million, including $9 million in one-time funds replaced by $6.8 million recurring). Staffing vacancies dropped from 82 in January to approximately 40 currently, with many hires in progress. The electronic inventory management system (ServiceNow) is on track for implementation this fiscal year.
• Crisis Services: DBH plans to consolidate crisis services in-house by phasing out contracts for crisis beds (16 community beds) and the children’s mobile crisis team (CHAMPS). CPEP (16 beds) will move to 35 K Street. Utilization of CPEP crisis beds is currently zero, but the agency expects to add crisis beds at the new site. The timeline for the new CPEP is June 2027; construction has not yet begun. The CHAMPS contract will be eliminated, with six new child-trained clinicians added to the Community Response Team (CRT) for 24/7 coverage.
• School-Based Behavioral Health: The FY27 budget includes $18.5 million (the lowest since program inception). The implementation timeline is extended through SY 2028-29, and 5-6 CBO partners will be retained. DBH has hired 13 of 21 planned clinicians for FY26; for FY27, four more clinicians will be hired. The environmental scan and school engagement will continue through May.
• Local Only MHRS: A new local benefit plan ($10.5 million) replaces the previous $8.5 million reduction in local only mental health rehabilitation services. The new plan covers clinically based services (therapy, assessments) and maintains ACT, while limiting CSS and recovery support services (RSS) not associated with residential treatment.
• Federal Grants: DBH has underspent several SAMHSA grants (e.g., ARPA SABG lapse of $4.1 million, MHBG lapse of $1.1 million). The agency is coordinating with the opioid abatement fund and increasing financial monitoring to improve grant execution.
• Opioid Abatement Fund: $10.6 million in new revenue is budgeted. The stabilization center in Ward 1 is under construction with a January opening; no funding is set aside for a second center. Grantees awarded last summer have not yet received funds due to budget approval delays.
• Housing: DBH vouchers are significantly lower than DHS or DCHA rates (e.g., $1,230/month for a one-bedroom vs. $3,020 for DHS). The Community Connections program operates in nine apartment buildings. Two contract lines for housing case management were noted; the agency will clarify.
• My Rides Transportation Program: Paused due to misuse; DBH plans to reinstate with a different vendor, funded by SOR grant.
• Hoarding Disorder: DBH lacks a specialized provider; cases are referred to Core Service Agencies (CSAs) and coordinated with DACL and FEMS via a monthly task force.
• Gambling Disorder: Services are available through Medicaid (19 providers billing), but utilization is low. A one-time training was provided; ongoing training is not funded.

Key Outcomes

• DISB: The Financial Empowerment Center will close; the agency will explore alternative service delivery. The Securities and Banking Regulatory Trust Fund sweep remains a concern. No formal votes were taken; the committee will follow up on classification audits and the OIG risk assessment.
• DBH: Crisis bed contracts and CHAMPS will be phased out by September 30, 2026, with services brought in-house. The school-based behavioral health plan will continue with extended timelines and retained CBO partners. The agency will revise its grant management processes and seek to improve federal grant spending. The public record remains open until Friday, May 8, 2026. The next committee hearing is Monday, April 27, 2026, at 9:30 AM, for public witnesses on the Department of Health Care Finance and the Deputy Mayor for Health and Human Services.