Budget Oversight Hearing for DMHHS and DHCF – May 11, 2026

Chairperson Christina Henderson convened a budget oversight hearing on May 11, 2026, to review the proposed FY27 budgets for the Office of the Deputy Mayor for Health and Human Services (DMHHS) and the Department of Healthcare Finance (DHCF). The hearing was rescheduled from April 29 and focused on a $1.1 billion citywide budget gap, reductions in the Interagency Council on Homelessness (ICH) staff, encampment clearing strategies, and significant Medicaid and Alliance program changes. Deputy Mayor/Director Wayne Turnage testified, joined by senior staff.

Discussion Items

DMHHS Budget and ICH Staffing

• The proposed FY27 budget reduces ICH staff by seven FTEs (five currently filled), leaving only the director. The cuts were driven by funding pressures in the parent agency (DHS). Deputy Mayor Turnage acknowledged the challenge for the ICH director to continue work without support.
• One FTE (senior advisor) was transferred to the Deputy Mayor for Education (DME) to correct a prior placement error.
• Two new positions (public affairs specialist, data visualization specialist) were proposed but remain unfilled; the data role was originally intended for ICH support.

Encampment Strategy and Bridge Housing

• Jamal Wilson reported 60–65 encampment sites with about 85 residents, down from over 200 sites and 120 residents three years ago. The city's approach shifted to offering shelter beds to all encampment residents, aiming to close encampments, but summertime reluctance to go indoors remains a challenge.
• The Aston bridge housing program remains capped at 100 beds; expansion is not planned due to management concerns. E Street bridge housing is not at capacity, and a third site is being sought but has not been found. The pilot that housed 115 individuals from four large encampments is still tracking those residents.

St. Elizabeth's Hospital and Work Requirements

• Meetings with St. Elizabeth's leadership have been productive, but the FY27 budget includes a $14 million reduction for the hospital. Deputy Mayor Turnage cited progress on hiring and infrastructure, though staff frustration over rescheduled meetings was noted.
• SNAP work requirements begin June 2026; Medicaid work requirements start January 2027. Deputy Mayor Turnage expressed concern that many beneficiaries may not qualify due to work activity exemptions. The city is working on communication plans, with a new contract for outreach and a three-month grace period for recertification.

DHCF Budget Overview

• The DHCF proposed budget is $5.3 billion total funds, $169 million less than FY26, primarily due to lower projected spending and a shift of 15,000 former Medicaid beneficiaries to Healthy DC. Local funds increase by $64 million to cover aging population, dental/vision benefits, and backfill of federal DCAS cuts.
• The mayor maintained eligibility for childless adults (up to 138% FPL) and avoided a $1 billion cut to the healthcare system, instead cutting $48 million in Direct Medical Education (DME) payments to hospitals.

Medicaid and Alliance Changes

• The Alliance program saw a steep decline in enrollment due to lowered eligibility (from 215% to 138% FPL) and a moratorium on new adult enrollments. Lower renewal rates also contribute to savings. The budget includes $5.7 million for dental/vision in Healthy DC and $3.9 million for Alliance, effective January 2027.
• Recertifications for Alliance will remain annual and not require in-person visits, but Medicaid childless adults will face six-month recertifications starting January 2027 per federal law.

Direct Medical Education Cuts

• The elimination of $14.9 million in DME payments was a trade-off to preserve broader coverage. Hospitals expressed alarm, and Deputy Mayor Turnage noted concerns about Washington Hospital Center's financial health, especially given a $30 million overpayment issue with Howard University Hospital on DSH.

Case Management and Managed Care

• Deputy Mayor Turnage criticized managed care plans for inadequate case management, noting that $52 million annually is spent on care coordination but plans are not meeting contractual thresholds. He proposed moving case management to FQHCs, citing a study from the Primary Care Association showing lower emergency room use among Alliance beneficiaries treated at FQHCs.

Other Items

• The MMIS upgrade went live March 2, 2026, with CMS approval pending final certification.
• Centralized credentialing for providers is under consideration, but cost estimates are needed.
• The Cedar Hill reserve fund (up to $25 million) is funded; the required meeting with UHS is scheduled for June, and the public report will follow.
• A streamlined preferred drug list for all Medicaid programs is expected to save $1.6 million.
• The administration is considering extending the Alliance grace period beyond 90 days, but no cost estimate has been done.
• The Office of Food Policy may be moved to DMHHS if restored by the Council.

Key Outcomes

• No formal votes were taken during the hearing. The committee will mark up its budget report on May 20, 2026.
• Chair Henderson requested that the Cedar Hill report be released before the June meeting if the meeting is delayed.
• DHCF committed to providing cost estimates for removing the Alliance age moratorium and restoring eligibility to 215% FPL by the end of the day.
• The Deputy Mayor agreed to request that the St. Elizabeth's meeting schedule be resumed promptly.
• The committee will follow up on vendor performance documentation and the potential for DHCF to absorb $199,000 for DCAS software upgrades for the Medicaid buy-in bill.
• The public record for written testimony closes at 5 p.m. on May 11, 2026.