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Legislators Compromise on MH/DS Funding

posted by Chris Sparks on Saturday, August 2, 2014

Iowa’s mental health and disability services system (MH/DS) has been something Iowa Legislators have been working on for almost two decades. Over the last two years, they have made some very important changes to the way non-Medicaid services are delivered.

As of July 1, 2014, the changes that have been made will be fully operational, moving Iowa toward a more uniform regional system.

Regions will now all be required to have a set of basic "core services" that are available to Iowans with intellectual disabilities and mental illness. Regions will also be encouraged to begin developing "core plus" services such as crisis stabilization, as funds are available.

Previous redesign legislation did make a lot of changes but not all of them were permanent. State funding for the system was only in place until June 30, 2015, and local funding (property tax) was only allowed through June 30, 2016. However, the biggest challenge was figuring out how to calculate the savings, called "Medicaid Offset," these counties might see from people signing up for health insurance through the Iowa Health and Wellness Plan.

The good news is Legislators were able to find common ground. A small group worked out the details of a compromise that will provide regions with greater financial stability for the next two years. This will allow time to determine how much money is needed to provide core services, core plus services, and services to other populations (i.e. people with brain injuries and people with developmental disabilities other than intellectual disabilities.)

Here are the details of the Medicaid redesign:

Increases funding for regional mental health and disability services by $735,435. This maintains the $47.28 per person spending level.

Extends the "Equalization Formula" and county property tax levies for another year (through June 30, 2016). Since the authorization was set to expire after next year, this will give regions the stability to evaluate the impacts of the redesign, health care reform, and the new payment system.

Continues the Medicaid Offset, but outlines a process for calculating actual savings. The Medicaid offset reduces funding to MH/DS regions who "save" money because of the Iowa Health and Wellness Plan. The formula passed will look at actual county expenses.

Allows counties to maintain a 25% ending fund balance. The Redesign Interim Committee felt it was important for counties to have enough money in the bank to get through the first three months of the fiscal year. Anything over 25% of the county’s budget is to be spent on expanding core services and developing core plus services.

About The Author

Chris Sparks served as EPI's third ever Executive Director from 1998 until 2022.