Adds to existing law to establish the Merit-Based Health Care Act.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 928 BY WAYS AND MEANS COMMITTEE AN ACT1 RELATING TO THE MERIT-BASED HEALTH CARE ACT; AMENDING TITLE 56, IDAHO CODE,2 BY THE ADDITION OF A NEW CHAPTER 25, TITLE 56, IDAHO CODE, TO PROVIDE3 A SHORT TITLE, TO PROVIDE LEGISLATIVE FINDINGS AND INTENT, TO DEFINE4 TERMS, TO ESTABLISH PROVISIONS REGARDING PROHIBITED ACTS, TO ESTABLISH5 PROVISIONS REGARDING MEDICAID CONTRACTUAL COMPLIANCE, TO ESTABLISH6 PROVISIONS REGARDING ENFORCEMENT AND PENALTIES, TO ESTABLISH PROVI-7 SIONS REGARDING A LIMITED PRIVATE RIGHT OF ACTION, AND TO ESTABLISH8 PROVISIONS REGARDING FEDERAL PREEMPTION; AND DECLARING AN EMERGENCY9 AND PROVIDING AN EFFECTIVE DATE.10

Be It Enacted by the Legislature of the State of Idaho:11

SECTION 1. That Title 56, Idaho Code, be, and the same is hereby amended12 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-13 ter 25, Title 56, Idaho Code, and to read as follows:14 CHAPTER 2515 MERIT-BASED HEALTH CARE ACT16 56-2501. SHORT TITLE. This chapter shall be known and may be cited as17 the "Merit-Based Health Care Act."18 56-2502. LEGISLATIVE FINDINGS AND INTENT. (1) The legislature finds19 that:20 (a) Medicaid participation is voluntary and subject to reasonable con-21 ditions imposed by the state as a steward of public funds;22 (b) Employment decisions based on merit and professional qualifica-23 tions promote patient trust and high-quality care; and24 (c) Employment practices unrelated to job-related qualifications or25 business necessity undermine program integrity, workforce competency,26 and the efficient use of public funds.27 (2) It is the intent of the legislature to:28 (a) Ensure that health care employment and contracting decisions29 funded by medicaid are based on individual merit, qualifications, and30 clinical competency;31 (b) Prohibit the use of state medicaid funds to support ideological or32 discriminatory employment practices; and33 (c) Preserve compliance with all applicable federal civil rights and34 medicaid requirements.35 (3) Nothing in this chapter is intended to authorize discrimination36 prohibited by federal law or to interfere with patient-specific medical37 decision-making.38 56-2503. DEFINITIONS. As used in this chapter:39

2 (1) "Discriminatory hiring" means granting a preference or imposing a1 disadvantage in employment or contracting based on race, sex, sexual orien-2 tation, gender identity, or national origin, except as expressly required by3 federal law.4 (2) "Diversity, equity, and inclusion" or "DEI" means the policies com-5 monly known and practiced as DEI, critical race theory, or anti-racism, any6 form of race or sex stereotyping or scapegoating, or the concepts that:7 (a) One race or sex is inherently superior to another race or sex;8 (b) The United States is fundamentally racist or sexist;9 (c) An individual, by virtue of the individual's race or sex, is in-10 herently racist, sexist, or oppressive, whether consciously or uncon-11 sciously;12 (d) An individual should be discriminated against or receive adverse13 treatment solely or partly because of the individual's race or sex;14 (e) Members of one race or sex cannot and should not attempt to treat15 others without respect to race or sex;16 (f) An individual's moral character is necessarily determined by the17 individual's race or sex;18 (g) An individual, by virtue of the individual's race or sex, bears re-19 sponsibility for actions committed in the past by other members of the20 same race or sex;21 (h) An individual should feel discomfort, guilt, anguish, or any other22 form of psychological distress on account of the individual's race or23 sex;24 (i) Meritocracy or traits such as a hard work ethic are racist or sexist25 or were created by a particular race to oppress another race; or26 (j) All people should be compelled to believe in and speak in a manner27 consistent with the concept that an individual can change the individ-28 ual's sex or gender.29 (3) "Health care provider" means any individual or entity that volun-30 tarily participates in the Idaho medicaid program or receives medicaid reim-31 bursements in whole or in part through a state-contracted managed care net-32 work.33 (4) "Prohibited DEI conduct" means any policy, practice, training, or34 requirement that includes:35 (a) Consideration of DEI in hiring, promotion, compensation, disci-36 pline, termination, or contracting decisions;37 (b) Race-based or sex-based preferences, targets, benchmarks, quotas,38 or equity goals;39 (c) Mandatory bias, implicit bias, systemic bias, or similar training40 that assigns responsibility, disadvantage, or professional outcomes41 based on protected characteristics rather than individual merit or per-42 formance; or43 (d) Required statements, pledges, attestations, or affirmations en-44 dorsing diversity, equity, and inclusion principles or related ideo-45 logical frameworks as a condition of employment or contracting.46 (5) "Public-facing communication" means any communication made avail-47 able to the public, including marketing materials, websites, mission or48 value statements, publicly presented staff trainings, facility signage, or49 social media.50

3 56-2504. PROHIBITED ACTS. (1) With respect to employment, policies,1 training, or communications, a health care provider shall not:2 (a) Engage in discriminatory hiring or prohibited DEI conduct;3 (b) Adopt or implement internal policies or trainings that constitute4 prohibited DEI conduct; or5 (c) Use state funds, including medicaid reimbursements, for any pub-6 lic-facing communication that promotes prohibited DEI conduct.7 (2) Nothing in this section shall be construed to prohibit:8 (a) Compliance with title VI of the civil rights act of 1964 or other9 applicable federal civil rights laws;10 (b) Collection of demographic data for legitimate clinical care, qual-11 ity reporting, or public health purposes;12 (c) Patient-specific medical discussions related to biological, ge-13 netic, or epidemiological risk factors;14 (d) Non-ideological training required for clinical competency, licen-15 sure, accreditation, or federal program compliance; or16 (e) Workforce training, quality improvement initiatives, or dispar-17 ity-reduction programs required or encouraged by federal law, centers18 for medicare and medicaid services guidance, or accreditation bodies.19 56-2505. MEDICAID CONTRACTUAL COMPLIANCE. (1) Compliance with this20 chapter shall be a material condition of all Idaho participating medicaid21 health care provider agreements as applied to medicaid-funded activities.22 (2) This section shall be implemented in a manner consistent with fed-23 eral medicaid requirements and centers for medicare and medicaid services24 guidance.25 56-2506. ENFORCEMENT AND PENALTIES. (1) The attorney general may in-26 vestigate alleged violations of this chapter upon receipt of a formal com-27 plaint.28 (2) Prior to the imposition of civil penalties, the department shall29 provide written notice and an opportunity for corrective action.30 (3) The attorney general may seek civil penalties for violations of31 this chapter as follows:32 (a) For a health care provider with fifty (50) or more employees:33 (i) A penalty not to exceed ten thousand dollars ($10,000) for a34 first violation;35 (ii) A penalty not to exceed fifty thousand dollars ($50,000) for36 a second violation; and37 (iii) A penalty not to exceed one hundred thousand dollars38 ($100,000) for a third or subsequent violation; and39 (b) For a health care provider with fewer than fifty (50) employees:40 (i) A penalty not to exceed five thousand dollars ($5,000) for a41 first violation;42 (ii) A penalty not to exceed twenty-five thousand dollars43 ($25,000) for a second violation; and44 (iii) A penalty not to exceed fifty thousand dollars ($50,000) for45 a third or subsequent violation.46

4 56-2507. LIMITED PRIVATE RIGHT OF ACTION. A health care professional1 may bring an action solely for retaliation arising from refusing to partici-2 pate in prohibited DEI conduct. Remedies may include reinstatement, injunc-3 tive relief, compensatory damages, and reasonable attorney's fees.4 56-2508. SAVINGS CLAUSE AND FEDERAL PREEMPTION. Nothing in this chap-5 ter shall be construed to restrict conduct required or encouraged by fed-6 eral civil rights law, centers for medicare and medicaid services guidance,7 or federal conditions of participation. If any provision of this chapter is8 preempted by federal law, such provision shall be severed while the remain-9 der remains in full force and effect.10

SECTION 2. An emergency existing therefor, which emergency is hereby11 declared to exist, this act shall be in full force and effect on and after12 July 1, 2026.13