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Mental Health & Disability Services Redesign Update

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The Legislature is making quite a bit of progress on many of the unresolved issues around the redesign of the state's mental health and disability services (MH/DS) system.  Here's a quick review.

Money to help counties get through the rest of this year (Transition Fund).  The Senate Appropriations Committee will take up House File 160 on Monday (March 11) at 2:30 p.m. This is the bill that allocates $11.6 million to 26 of the 32 counties that applied for Transition Funds to help them make it through the current fiscal year without cutting services or starting waiting lists.  These "transition funds" were meant to stabilize the system as the state moved from a county based system to a regional one. Last year the state took all money that had been going to counties, but also assumed the responsibility of paying for the non-federal share of all Medicaid services.  This "Medicaid Lift" helped some counties, but without state funds, other counties found themselves in trouble. Six counties that had applied for transition funds will not get money from this bill because they will end their year with some money left in the bank (although they will argue they need this cash balance to pay bill while waiting for property taxes to come in three months later).  The 26 counties that would receive funds from this bill will also be at "zero" at the end of the year, so they too will have the same "cash flow" problem.  If the Senate does not amend the bill, it will go straight to the Governor for signature.  Senators are considering an amendment that would change the source of the funds, so counties would not run into trouble spending the money.

Money to help those other six counties (Transition Plus). Rep. Megan Hess of Cherokee has introduced a bill (House File 399) that allocates $750,000 to pay off a portion of the Medicaid bills in the counties that didn’t receive transition funds. Five of the six counties that applied for transition funds and were not included in the transition fund recommendations have outstanding Medicaid bills. This doesn't cover all of the obligations out there, but does help with some.  The bill is in the House Appropriations Committee, where it is not subject to funnel deadlines.  Rep. Dave Heaton of Mount Pleasant is assigned as the subcommittee chair, along with Rep. Dean Fisher of Garwin and Rep. Lisa Heddens of Ames.

Money for next year (Per Capita Equalization).  The legislators serving on the Fiscal Viability Committee made several recommendations for changes in the redesign law, including passage of the $29.8 million needed to equalize funding for regionally delivered, county funded non-Medicaid core services.  This $29.8 million equalization fund makes sure that every county has $47.28 per person living in their area to spend on mental health and disability services.  The money goes out to counties that raise less than $47.28 per person living in their county; counties raising more than that amount locally must cut their property taxes and will not receive money from the state.  Senate Study Bill 1199 passed out of committee this week, and will head to the Senate Appropriations Committee once it gets a new number. The bill as amended does a number of things:

  • Appropriates the $47.28 equalization funds ($29.8 million) promised last year to help pay for core regional services to people not eligible for Medicaid or for core services not covered by Medicaid.

  • Allows county mental health programs to pay for services to people in community-based corrections if funds are appropriated.

  • Directs the MH/DS Commission to make recommendations on ways to better coordinate substance use disorder and mental health funding.

  • Establishes a children’s cabinet to address the mental health needs of children (systems of care approach) and creates a Center for Child Health Innovation and Excellence to provide a policy forum for efforts to improve overall child health (subject to funding).

  • Grandfathers in non-target eligibility groups currently served (regions are only required to pay for the "targeted populations" of individuals with intellectual disabilities and mental illness, even though many counties serve people with other developmental disabilities, people with brain injuries, and children with mental illnesses; this allows counties to continue to maintain this level of service).

While SSB 1199 passed out of committee, there is more work to be done.  Some Senate Democrats don't like the "per capita equalization formula" that is currently in law, and would like to distribute the $29.8 million in a different (yet to be announced) way.  House Republicans say it's the law, and they plan to live up to their promise to fund the current distribution.  Counties say they've already set their budgets based on the $47.28, and they don't want to change course now.  Seems nothing is ever simple when it comes to MH/DS services reform.