Lawmakers press DHS, DFA after $90 million Medicaid trust‑fund draw in February
March 17, 2026 | 2026 Legislature AR, Arkansas
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Senators and representatives pressed the Department of Human Services (DHS) and the Department of Finance and Administration (DFA) about a large Medicaid trust‑fund draw in February, when DHS reported $90,000,000 in outbound transfers for the month.
Senator Hickey asked whether February’s use represented a trend that would deplete reserves. DHS secretary Janet Mann said $66,000,000 of the February total came from the trust fund and the remainder covered purposes such as nursing‑home weekly transfers and matching requirements. Mann described February as a low state‑general‑revenue month that historically requires higher trust‑fund use and projected the year‑end balance to fall between $150 million and $200 million, acknowledging the range could change with quarterly payments and refunds.
DFA Secretary Jim Hudson confirmed the committee’s understanding that one $100 million set aside for FY26 remains untouched and that the governor’s budget proposal includes a second $100 million set aside for FY27; Hudson said the administration expects to tap into set asides in FY27 as needed. Members pressed for clearer, historical data; Senator Hickey and others asked staff to bring multi‑year comparisons of typical monthly outflows to help determine whether February’s draw was exceptional.
DHS officials said the $25.7 million pay‑plan appropriation requests under consideration were appropriation‑only and did not request new funding; DFA explained roughly $60 million in appropriation authority remained after the session’s requests and that performance‑fund dollars available for pay adjustments were roughly $45 million.
Committee members requested written plans and additional documentation: DOC was asked to provide a historical hiring/vacancy brief; DHS was asked to provide a written staffing plan for the human development centers and to circulate reports on recent transfers and trust‑fund activity.
Next steps: agencies will supply the requested documentation and the committee will continue trust‑fund monitoring as the fiscal year progresses.
Senator Hickey asked whether February’s use represented a trend that would deplete reserves. DHS secretary Janet Mann said $66,000,000 of the February total came from the trust fund and the remainder covered purposes such as nursing‑home weekly transfers and matching requirements. Mann described February as a low state‑general‑revenue month that historically requires higher trust‑fund use and projected the year‑end balance to fall between $150 million and $200 million, acknowledging the range could change with quarterly payments and refunds.
DFA Secretary Jim Hudson confirmed the committee’s understanding that one $100 million set aside for FY26 remains untouched and that the governor’s budget proposal includes a second $100 million set aside for FY27; Hudson said the administration expects to tap into set asides in FY27 as needed. Members pressed for clearer, historical data; Senator Hickey and others asked staff to bring multi‑year comparisons of typical monthly outflows to help determine whether February’s draw was exceptional.
DHS officials said the $25.7 million pay‑plan appropriation requests under consideration were appropriation‑only and did not request new funding; DFA explained roughly $60 million in appropriation authority remained after the session’s requests and that performance‑fund dollars available for pay adjustments were roughly $45 million.
Committee members requested written plans and additional documentation: DOC was asked to provide a historical hiring/vacancy brief; DHS was asked to provide a written staffing plan for the human development centers and to circulate reports on recent transfers and trust‑fund activity.
Next steps: agencies will supply the requested documentation and the committee will continue trust‑fund monitoring as the fiscal year progresses.
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