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Legislature Passes Balanced Budget

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By law, Iowa legislators can spend 99% of the money it collects in taxes for the year. But this year a group of legislators agreed not to spend more than $7 billion, even though that meant spending less than allowed.  In order to pass a budget, legislators agreed to spend only 91% of the money available ($6.97 billion).   While the state will have nearly $2 billion in its savings account by the end of next year, some legislators (and the Govenror) did not want to spend that money and say those funds are needed to pay for the property tax and educational reforms passed last year.

Legislators agreed to spend another $139.8 million to pay off some of the state's debt ($60 million) and fund one-time projects that include building renovations at state universities and electronic medical records for substance use treatment providers and community mental health centers. The biggest challenge to the state's Health and Human Services Budget this year was a change in the federal match rate for Medicaid, something the state cannot control.  Because Iowa's economy has been better than other states, the Medicaid match rate went down, so Iowa must come up with more money to pay for Medicaid services.  This year, that meant an addiional $35 million was needed just to provide the same level of service.

While legislators were able to find $6 million to provide services to people on the HCBS waiver waiting lists, Iowa's Medicaid program did not get the $30 million it needs to make it through the final two months of this fiscal year (May and June 2014). Here is more detail about the budget passed:

For People with Disabilities & Family Members

  • Fully funded Medicaid for next year ($1.3 billion) but did not add the $30 million needed to get through the current year (May & June 2014).  Mediciad is short about $30 million this year, and does not have enough money to pay for services for the next two months. We do not know what Medicaid plans to do; that will be a decision made by the Governor and DHS but could include temporary provider cuts, waiting lists, and delays in starting new programs. The Governor can also shift money around if there are other programs that will not spend all of their money. We will post more information on this as it becomes available.
  • Added $6 million to take people off HCBS Waiver waiting lists. There are currently more than 7,000 individuals with disabilities waiting for Medicaid waiver services (Health and Disability Waiver; Brain Injury Waiver; Physical Disability Waiver; Children's Mental Health Waiver).  The Governor vetoed similar appropriations last year - so if this is important to you, make sure you let the Governor know!  
  • Increases funding for Regional Mental Health/Disability Services (MH/DS) by $735,435 to maintain the $47.28 per person spending level (per capita equalization) - the total funding for regions is now $30,555,823.        

  • Adds new funding ($250,000) for a mental health advocate division in the Department of Inspections and Appeals. This was part of the recommendation of the MHDS Redesign Study Committtee, but it does not do anything to create a common job description or make sure the people serving in this position meet a minimum set of qualifications.  Last year the Governor vetoed this appropriation.

  • Maintains funding for the state's brain injury services program ($891,644) and the $95,000 earmark for the brain injury program service manager. 

  • Adds $50,000 to the program that provides education, client-centered programs, and client and family support for people living with epilepsy and their families (total $149,823).   The additional funds must be matched dollar for dollar with private funds.

  • Adds $1 million to the state's Autism Support Program ($3 million total), which was created last year to provide Applied Behavioral Analysis and other treatment for children that do not qualify for Medicaid and whose private insurance does not provide autism coveraage.

  • No change in funding for other autism programs funded by the state - including the University of Iowa's Regional Autism Services Program (RASP) provided through the network of child health specialty clinics ($400,000), Four Oaks autism services ($25,000), Dubuque hospital-based autism support ($25,000),

  • Adds $775,000 for additional client services provided by the Division of Vocational Rehabilitation in the Department of Education - this was needed to draw down additional federal dollars.  Iowa was not fully matching federal dollars, so the state was continuing to miss out on federal funding for these services.  The Legislature also increased funding for independent living services at Vocational Rehabilitation by $50,000, and the Centers for Independent Living by $50,000.  Also increases funding for independent living programs in the Department for the Blind by $250,000. 
  • No change in funding for the Entrepreneurs with Disabilities Program ($145,535) and increased funding by 4% to the Iowa School for the Deaf ($361,000) and Iowa Braille & Sight Saving School ($151,000).
  • Appropriates $5 million over two years to Broadlawns Hospital for a new inpatient psychiatric hospital wing and outpatient clinic ($2 million in FY15 and $3 million in FY16).  This Polk County hospital made the case that it is now serving as the psychiatric hospital for a big part of the state, as other hospitals have closed their psychiatric programs.  This new $20 million facility will add 12 psychiatric beds to its existing 30 (which are full 100% of the time) and feature a new outpatient clinic.  The bill also gives new psychiatric medical residencies preference in getting some of the $2 million available to train new doctors, which should help Broadlawns create a new psychiatric medical residency program (right now, the University of Iowa has the only one in the state).
  • Adds $200,000 to build a new inpatient psychiatric bed tracking system.  This was another recommendation of the MH/DS Redesign Study Committee.  It is difficult for hospitals, medical providers, law enforcement, and family members to find available psychiatric beds, and there are stories of people travelling across the state, only to find the bed taken.  This would create a real-time tracking system - so beds are located quickly, and people are stabilized faster.  The Department of Human Services is to work with MHDS regional administrators and provider groups to get this in place.

  • Adds $107,608 for a discharge specialist to assist residents and tenants with voluntary and involuntary discharges and evictions from health care facilities.  This was a recommendation made by the Governor, and a high priority for the Office of Long-Term Care Ombudsman.  This position helps people transition out of nursing home levels of care, and find other community placements..    

  • Makes $100,000 available to study placement options for hard-to-place persons or sex offenders needing long-term care services.  There have been several high-profile cases of sexual assaults in care facilities after sex offenders have been placed there by court orders.  Residents of care facilities have been concerned about their safety, but lawmakers have not been able to find alternative placement options for sex offenders that need that level of care.  Legislators have in the past looked at funding a speicialized facility or dedicating space in one of the state's institutions, but no action has been taken.  The Department of Human Services is directed to select a private group to perform this study and make recommendations to the Legislature.   
  • Directs DHS to work with other state agencies, regional MH/DS system, providers, and other stakeholders to study community-based placement options for persons with serious mental illness. The goal is to find ways to divert people with serious mental illness from or end their need for institutional placement.  The group is to review of services currently available, services that should be developed, regulatory and liability issues involved, funding needed and availble, and other barriers to maintaining current community-based options and developing new options.  The group will report back to the Legislature by December 15, 2014 with recommendations.
  • Requires the State Patrol and Department of Public Safety to implement the Endangered Persons Alert System, which issues alerts when a person with a cognitive disorder goes missing.  Similar to an "Amber Alert" when children are abducted, this will help notify the public when a person with an intellectual disability or older person with dementia goes missing.

  • Requires the Department of Education to submit a written report to the Legislature (by 1/15/15) detailing the department's anti-bullying programming and current and projected expenditures for such programming for the fiscal year.  No other bullying prevention legislation passed this year, despite much discussion and work on it.

For Providers & Caregivers

  • Very few provider increases this year.  EMS providers will get a 10% increase.  Community mental health centers will be able to choose between cost-based reimbursement and an alternative reimbursement methodology developed by Magellan (retroactive to July 1, 2013).  Several CMHCs say Medicaid is three years behind on reimbursements, threatening the financial stability of some centers.  No increase for hospitals this fiscal year, but nursing homes got a partial supplemental rebase.  Hospital rebasing would have cost $6 million.  Language in the budget delays the rebase until October 1, 2015, but that is outside this fiscal year.  Nursing homes received a supplemental rebase of $1.25 million.  Last year, their rebase was short by $4 million, so this appropriation only partially addresses that shortfall. 
  • Directs the Department of Public Health to work with stakeholders to review reimbursement to substance-related disorder providers, including adequacy of reimbursement, whether it is appropriate to rebase reimbursement, reimbursement equity compared to other behavioral health service providers, and the effect of health coverage expansion through IHWP), with recommendations due 12/15/14.
  • Appropriates $3.6 million to help community mental health centers and substance abuse providers pay for electronic health records - $800,000 goes to DHS for up to $100,000 grants to community mental health centers, and $2.8 million to substance abuse providers in one-time funds for the purchase of electronic health records and data warehouse technology.  Both grants require systems to be operational by July 1, 2018, and consistent with federal requirements.
  • Extends presumptive eligibility to federally qualified health centers and others upon request for the Iowa Health And Wellness Plan population (subject to federal approval).  Presumptive eligibility allows the provider to provide immediate Iowa Health and Wellness Plan covered services to a person that qualifies for that coverage. The person is assumed to be eligible if they meet the qualifications on paper, but the provider will not have to wait for enrollment to be finalized in order to be paid for the services.

  • Requires the Iowa Medicaid Enterprise (IME) notify legislators when a state plan amendment or Medicaid waiver is submitted.  Lawmakes were upset that more information was not given to them throughout the process of submitting the Iowa Health and Wellness Plan; this language was prompted by that frustration.

  • Requires IME to release an RFP for a contract with a private vendor to establish an electronic asset, income, and identity eligibility verification system for determining and redetermining Medicaid eligibility (effective upon enactment). IME is required by federal law to do this service, but they have another year before the federal requirement begins.  While this tells IME to release the RFP, it does not say it must award it. 

  • Directs the Departments of Human Services, Public Health, Aging, Workforce Development, and Corrections to implement an interagency collaborative effort to provide an integrated approach to address the medical and psychosocial needs of individuals upon release from a correctional facility, including communications with community-based providers (report 12/15/14 to address approach developed, barriers to implementation, and recommended changes to laws/rules).  
  • Eliminates $37,500 for development of uniform cost report, but requires to DHS report on implementation of the uniform cost report by 12/15/14. 

  • Appropriates $825,000 for the Homestead Autism Project to expand Altoona clinic and to a new site yet to be selected.  Other providers recieved funds as well for building and renovaations - $250,000 for the New Hope Center in Carroll and $250,000 for Camp Sunnyside Adult Day Program in Des Moines. 

  • Maintains funding for a contract with the Iowa Caregivers Association for education, outreach, recruitment and retention ($178,875) and caregiver conference and training scholarships ($75,000) – and increases funding for the Direct Careworker Advisory Council by $75,000 to make up for lost grant dollars ($213,400).


The Governor has until June 2 to take action on the budget bills that fund these programs.  The Governor is allowed to selectively veto parts of budget bills; this is called a "line item veto."  He cannot veto a word or a sentence, but can veto entire appropriations and paragraphs.  If you see something you want to make sure gets signed into law, contact the Governor!