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NEARLY $2 BILLION HEALTH/HUMAN SERVICES BUDGET SIGNED

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At the start of session, your lawmakers were faced with an $80 million shortfall in Medicaid for the current year and a $200 million increase needed for the next year.  This caused some legislators to refer to the Medicaid budget as the "Pac Man" of the state budget, gobbling up all available funds just to keep services at current levels.  Ultimately, the Governor signed the following into law last week:

  • Includes funding for the State Treasurer to implement the ABLE Act and purchase needed software.
  • Funds Medicaid at $40 million below the mid-point estimate (so more money will probably be needed next session).
  • Pays for the Medicaid 2014-2015 shortfall by using unspent funds, shifting money around in DHS, and using $43 million appropriated in the one-time funding bill.
  • Increases reimbursements for supported employment providers by 10%, HCBS waiver providers by .5%, and home health services by $1 million.  The Governor vetoed a 3% increase for substance abuse providers.
     
  • Modernizes the mental health advocate system to create efficiencies needed after legal settlement was ended - per the recommendations of the MH/DS Redesign.  Mental health advocates are appointed to represent the best interests of a person who is being committed for mental health treatment.
  • Creates a Legislative Health Care Policy Oversight Committee to watch over the transition to managed care and make recommendations for legislative changes.  Only legislators will serve on this committee, but each meeting will reserve time for public comment.
  • Directs DHS to hold monthly public meetings around the state (beginning March 2016) to get input from stakeholders and the public on the transition to managed care.  The Executive Committee of the Medical Assistance Advisory Council is directed to take all of the input received and turn it into recommendations for legislative or administrative action.  Nearly all (if not ALL) Medicaid providers are represented on the Medical Assistance Advisory Council.

  • Requires the development of a plan to create a “Health Care Ombudsman Alliance" to provide a permanent, coordinated system to help people navigate managed care plans and resolve complaints. Those to be involved in the development of this plan include: Long Term Care Ombudsman; Departments of Human Services, Public Health, and Inspections and Appeals; Disability Rights Iowa, Civil Rights Commission, Senior Health Insurance Information Program, Iowa Insurance Advocate, Iowa Legal Aid, and other consumer advocates and assistance programs.
  • Adds funding to hire two more Long Term Care Ombudsman staff and allows the Office of Long Term Care Ombudsmen to provide assistance and advocacy services to recipients of Medicaid long-term services and supports (and directs them to draw down federal Medicaid match to do this).  
  • Fails to appropriate $32 million in "MH/DS Equalization" funding for MH/DS regions. Only two regions will be affected by this - Polk and Southern Hills (because other regions have enough money to get through the year without state funds).  The four-county Southern Hills Region is to look at merging with another region; the $2 million appropriated to help the Polk County Region is not expected to be enough to avoid service impacts (their need was $4 million), but we do not yet know the extent of that impact.

  • Extends the $47.28 equalization formula until 6/30/17, giving legislators an additional year to consider other funding options (including one proposed by regions that allows them to self-fund with property taxes). No funding was appropriated for this extension - that will need to be done next year.  Nearly all regions are expected to need some state dollars when the Legislature comes back next year,  the although we do not yet know if the full $32 million will be needed.
  • Eliminates the Medicaid offset (repayment of savings due to Medicaid expansion) for MH/DS regions.  DHS will continue to calculate savings regions experience because of the implementation of the Iowa Health and Wellness Plan, but regions will no longer be required to repay 80% of those savings.
     
  • Ends the Prevention of Disabilities Council after this year, and directs several groups (including the Iowa Developmental DIsabilities Council) to work on a plan to transition the duties of the Council to other existing councils and agencies. 

The Governor did not approve (he vetoed) the following that prohibited DHS from:

  • Setting a uniform mileage rate ($.575/mile) for HCBS waivers and capping the total allowed at $9.29/one way. 
  • Reducing HCBS waiver slots (levels to stay at or over what was available on 1/1/15).
  • Fast tracking the CDAC transition to agency-based or Consumer Choices Option (will begin 7/1/15 instead of 7/1/16).

These vetoes mean the Governor can move up the transition from Consumer Directed Attendant Care (CDAC) a year early, starting July 1, 2015.  It also means that DHS can implement "cost containment" strategies to limit how much can be spent on HCBS waiver funded transportation.  The vetoes mean DHS can also reduce the number of HCBS waiver slots they have in anticipation of managed care, which could have the affect of increasing waiting lists. 

You can read the Governor's veto message for the Health/Human Services Budget here. You can read all of the Governor's veto messages here.