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FINAL BUDGET REVIEW

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The Legislature finished up their work after passing a $7.168 billion budget that keeps the Mt. Pleasant Mental Health Instiute open, allows a private geropsychiatic unit at Clarinda Mental Health Institute, adds $2 million for MH/DS regions, increases provider rates for HCBS providers and home health providers ($2 million), jumpstarts the ABLE Act, and provides a framework for the oversight of Medicaid managed care. 

Senate File 505 also sets requirements on managed care contractors - requiring provider rates be no lower than they are now and prohibiting DHS from closing down HCBS waiver slots.  Legislators also included language directing the Governor not implement controversial Medicaid cost containment measures that would have capped mileage reimbursement for HCBS transportation services and moved up the transition timeline for Consumer Directed Attendant Care services (moving to agency or Consumer Choices Option) by one year to July 1, 2015.

 Here is a very quick review of some other highlights:

  • Directs the Aging and Disability Resource Centers and the Mental Health and Disability Services Commission to submit a proposal to the Legislature to create a home modification grant and tax credit program Iowans with disabilities meeting the federal definition of “disability” and earning no more than 250% of the federal poverty level.

  • Increases funding for Medicaid by $52.5 million ($1.3 billion total). This is about $40.6 million short of estimates (so likely Medicaid will have a shortfall that lawmakers will need to address when they return in 2016).

  • Increases provider rates for nursing homes  ($17 million), home health providers ($1 million), HCBS providers by .5% ($1 million), supported employment providers by 10% ($750,000), and substance-related treatment providers by 3% (no fiscal impact).

  • Includes $66.5 million in Medicaid cuts for "cost containment" (including the $50 million the Governor plans to save in the transition to managed care). Also included in this is implementation of a complex pharmaceutical oversight program, change drug reimbursement methodology to the national average drug acquisition cost, and use of new functional assessments for certain Medicaid waiver services.
  • Prohibits the Governor from implementing cost containment strategies that cap HCBS waiver reimbursement for transportation, or speed up the transition from Consumer Directed Attendant Care to agency or Consumer Choices Option (this transition will be complete on June 30, 2016).

  • Requires DHS to submit an application to CMS/SAMHSA to participate in a two-year pilot project for certified community behavioral health clinics (but no additional money provided to do this).

  • Cuts the Medicaid Health Home Contract by $3 million (because it will become part of managed care), but continues level funding ($900,000) for the children's mental health home initiative.
  • Keeps the Mt. Pleasant Mental Health Institute (MHI) open, but reduces spending by $746,000.  Both the acute adult psychiatric services and inpatient dual diagnosis program remain open, with total funding of $6.4 million. 
  • Closes the Clarinda MHI psychiatric unit on December 16, 2015 ($1.8 million appropriation to keep it open for this six-month period). Directs DHS to issue an RFP to contract (beginning December 16, 2015) with a private nursing facility to manage a 15-bed geropsychiatric unit at Clarinda for hard to place persons who are sexually aggressive or combative due to mental illness or who have unmet geropsychiatric needs. 
  • Eliminates $30.6 million mental health and disability services equalization payments to regions because all but two regions have large ending fund balances.  Replaces this with $2 million appropriation directed to those regions who will not be able to maintain a 25% ending fund balance at the end of the next fiscal year (Polk County). DHS is directed to work with the Southern Hills region to look at options for merging into another region to address funding problems.
  • Extends the MH/DS Equalization Payment Formula for an additional year (until June 30, 2017) to give the Legislature time to develop a new structure (no funding appropriated).  Freezes the MH/DS per capita levy rates at FY15 levels and eliminates the Medicaid offset that required regions to pay back savings from the Iowa Health and Wellness Plan. So no state money for regions this year beyond their local property taxes and the $2 million for the Polk County Region.
  • Cuts the Autism Treatment Program by $1 million ($2 million remaining) but allows a family to submit a health benefits summary showing that no autism services are covered in lieu of a formal denial of payment from the insurance company in order to be eligible for reimbursement from the program.   The program is also modified to allow reimbursement for services provided by a Board Certified Assistant Behavior Analyst who is supervised by a Board Certified Behavior Analyst (and adds licensed psychologists and psychiatrists to the list of qualified providers),.  Finally, the Legislature appropriated $250,000 to establish a grant program to support educational expenses of persons pursing board certification as a behavior analyst or assistant behavior analyst.

  • Reduces the Family Support Subsidy by $107,807 due to children aging out, but shifts $102,000 of that to the Children at Home Program to add three new providers.

  • Extends the repeal of the Prevention of Disabilities Council for another year (June 30, 2016), and requires the MH/DS Commission and Iowa DD Council to work with the Prevention Council, the Department of Human Services, and the Department of Public Health to provide for a transfer of duties prior to dissolution.

  • Eliminates the restrictions on how funds can be disbursed from Medicaid Special Needs Trusts and sets new standards that are no more restrictive than federal law and enhances reporting requirements.
  • Directs DHS to establish (in cooperation with the Departments of Education and Public Health) a Children’s Mental Health and Well-Being Work Group made up of stakeholders to study and make recommendations on children’s mental health and well-being (including crisis response). A report is due December 15, 2015.