S.F. _____ Section 1. FINDINGS AND PURPOSE. 1 1. The general assembly finds that full implementation 2 of the federal Patient Protection and Affordable Care Act, 3 Pub. L. No. 111-148, in 2014 will have a significant impact 4 on services to low-income Iowans because eligibility for the 5 Medicaid program will be simplified to include individuals 6 having an income at or below 133 percent of the federal 7 poverty level. Consequently, the additional categorical 8 eligibility requirements now applicable for Medicaid program 9 eligibility, such as being a recipient of federal supplemental 10 security income (SSI) or for meeting Medicaid program waiver 11 requirements, will no longer apply. Because Medicaid is such 12 a significant funding source for Iowa’s state-county mental 13 health, mental retardation, and developmental disabilities 14 system for adults, the simplified eligibility change presents 15 an opportunity to reform that system. The simplified Medicaid 16 eligibility provisions coming into force in 2014 also will 17 provide Medicaid eligibility to many adults whose services 18 costs are wholly or primarily a county responsibility. 19 2. Under current law, counties pay the nonfederal share 20 of the costs of Medicaid program services provided to address 21 the needs of eligible adults with mental illness or mental 22 retardation and some counties voluntarily pay for Medicaid 23 program service costs to address developmental disabilities 24 in addition to mental retardation. Because the increases in 25 overall funding for such services have experienced very limited 26 growth in recent years, the annual increases needed to fund the 27 county Medicaid responsibility have been reducing the funding 28 counties have available to fund other non-Medicaid services. 29 With the federal expansion in those eligible for the Medicaid 30 program, significant new funding will be needed to provide the 31 match for the new eligible adults. 32 3. It is the intent of the general assembly to incrementally 33 shift responsibility for the funding of Medicaid services for 34 adults with mental illness or mental retardation from the 35 -1- LSB 1422XC (2) 84 jp/rj 1/ 6

S.F. _____ counties to the state so that the shift is completed by 2014 1 when the new federal law takes effect. 2 4. Among adults who have a serious mental illness, the 3 incidence of those with a co-occurring disorder involving abuse 4 of alcohol or another substance is much higher than among the 5 population without such an illness. However, the availability 6 of treatment that simultaneously addresses both disorders is 7 very limited. This situation could be helped by assigning 8 responsibility for both types of treatment to one state agency 9 instead of two, as is currently the case. 10 5. a. Under current law, if an adult has serious mental 11 illness or mental retardation and does not have a means of 12 paying for services, the primary responsibility to fund and 13 make the services available is assigned to counties. Although 14 many common elements do exist among the service arrays offered 15 by counties, a basic set of services is not available in all 16 counties, waiting lists for some services are in effect in 17 some counties, the availability of community-based services in 18 some counties is very limited, and other disparities exist. 19 For example, many publicly funded services available to young 20 persons are not continued when the young persons become adults 21 because public funding of the services does not exist for 22 adults. 23 b. It is the intent of the general assembly to address 24 such disparity by shifting the responsibility for adult mental 25 illness services from the counties to the state and requiring 26 regional county administration of the services for persons with 27 mental retardation. Regions covering a general population of 28 at least 300,000 would be of sufficient size to make services 29 availability more uniform. 30 6. a. Counties are limited to levying approximately $125 31 million in property taxes statewide for the services due to law 32 enacted in the mid-1990s. The state distributes to counties 33 approximately $89 million to replace equivalent reductions 34 in the amount of property taxes raised for this purpose. In 35 -2- LSB 1422XC (2) 84 jp/rj 2/ 6

S.F. _____ addition, for fiscal year 2010-2011, the state will distribute 1 to counties approximately $49 million in allowed growth funds, 2 approximately $14 million in community services funds, and 3 approximately $11 million to reimburse for state cases. 4 b. It is the intent of the general assembly to shift the 5 funding described in paragraph “a” and to provide additional 6 funding as necessary to accomplish the following goals: 7 (1) State assumption of Medicaid cost-share responsibility 8 currently held by counties. 9 (2) Improvement in the uniformity and availability of 10 services administered by both the state and counties. 11 (3) Provision of property tax relief through direct state 12 assumption of responsibility for costs and moving toward levy 13 uniformity. 14 c. It is the intent of the general assembly to shift $40 15 million or more of allowed growth funding for fiscal year 16 2011-2012 for use by the state to assume an equivalent-cost 17 county responsibility for funding of Medicaid program service. 18 Sec. 2. SERVICE SYSTEM REFORM PLANNING. 19 1. The department of human services shall consult with 20 stakeholders, including counties and service consumers, 21 providers, and advocates, in proposing a schedule, funding 22 provisions, and other associated actions necessary for 23 the state to incrementally assume the responsibilities of 24 counties for payment of the nonfederal share of Medicaid 25 program services by the date in 2014 when the Medicaid 26 program enhancements under the federal Patient Protection and 27 Affordable Care Act, Pub. L. No. 111–148, take effect. The 28 department shall submit the plan, accompanied by appropriate 29 findings and recommendations, to the governor and general 30 assembly on or before December 1, 2011. 31 2. The departments of human services and public health 32 shall consult with stakeholders, including counties and service 33 consumers, providers, and advocates, in developing a plan 34 for the shifting of mental illness services responsibilities 35 -3- LSB 1422XC (2) 84 jp/rj 3/ 6

S.F. _____ between the two departments as described in this Act. The 1 target date for implementation shall be July 1, 2012. The 2 departments shall submit the plan, accompanied by appropriate 3 findings and recommendations, to the governor and general 4 assembly on or before December 1, 2011. The plan shall include 5 recommended legislation addressing statutory changes necessary 6 for implementation of the plan and of section 125.99, as 7 enacted by this Act. 8 3. The department of human services shall consult with 9 stakeholders, including counties and service consumers, 10 providers, and advocates, in proposing a schedule, funding 11 provisions, and other associated actions necessary for the 12 regional administration of adult mental retardation and 13 developmental disabilities services consistent with the 14 legislative intent stated in this Act. The target date for 15 implementation shall be July 1, 2013. The department shall 16 submit the plan, accompanied by appropriate findings and 17 recommendations, to the governor and general assembly on or 18 before December 1, 2012. 19 Sec. 3. NEW SECTION . 125.99 Mental health and substance 20 abuse treatment authority. 21 1. Notwithstanding section 225C.3 or any provision of law 22 to the contrary, effective July 1, 2011, the department is 23 designated as the state’s adult mental health and substance 24 abuse services authority. 25 2. The authority shall do all of the following: 26 a. Develop a mental health and substance abuse services 27 infrastructure based on a business enterprise model and 28 designed to foster collaboration among all program stakeholders 29 by focusing on quality, integrity, and consistency. 30 b. Cost-effectively expand the availability of services for 31 those with a single mental illness or substance abuse disorder 32 and those with co-occurring disorders. 33 c. Form a close, collaborative relationship with the 34 Medicaid enterprise to effectively provide those services that 35 -4- LSB 1422XC (2) 84 jp/rj 4/ 6

S.F. _____ are funded by the Medicaid program. 1 d. Provide leadership to align the other providers and 2 funders of mental illness and substance abuse services into 3 a coherent provider continuum of services, including but not 4 limited to all of the following services: 5 (1) County-funded transportation and other services. 6 (2) Hospital services. 7 (3) Court-ordered services. 8 (4) Services provided in connection with the justice 9 system. 10 (5) Services provided in connection with the state’s 11 education systems for children and adults. 12 e. Identify and facilitate the development of a basic set of 13 services and other support to address the needs of adults with 14 mental illness and substance abuse problems. 15 f. (1) Develop a regional structure that is designed to 16 maintain county and other local investment and involvement 17 in addressing the needs of adults with mental illness and 18 substance abuse problems. 19 (2) The approaches considered in developing a delivery 20 system for meeting such needs shall include but are not limited 21 to adaptation of the physical health medical home model for 22 use in addressing mental health and substance abuse treatment 23 needs. 24 (3) The size of regions in the structure shall cover a 25 general population of at least three hundred thousand. 26 3. The recommendations, plans, implementation provisions, 27 and other actions taken by the authority and the stakeholders 28 working with the authority to implement this section shall 29 be guided by appropriate recognition of best practices, 30 departmental and service provider capacity, the diagnostic 31 criteria for the diseases and other conditions outlined in 32 the current edition of the diagnostic and statistical manual 33 of mental disorders published by the American psychiatric 34 association, and the value contributed by mental health and 35 -5- LSB 1422XC (2) 84 jp/rj 5/ 6

S.F. _____ substance abuse professionals to the well-being of the citizens 1 of this state. 2 Sec. 4. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 3 immediate importance, takes effect upon enactment. 4 EXPLANATION 5 This bill provides legislative findings, legislative 6 intent, and a planning process to reorganize state and county 7 responsibilities for provision and funding of services 8 for adults with mental illness, mental retardation, and 9 developmental disabilities. 10 New Code section 125.99 designates the department of 11 public health as the state’s mental health and substance abuse 12 services authority for adults with mental illness and substance 13 abuse service needs. Under current law in Code section 225C.3, 14 the division of mental health and disability services of the 15 department of human services is designated as the state mental 16 health authority for federal purposes. Various planning and 17 implementation duties are specified for the department of 18 public health authority. A statement of guiding principles is 19 included. Another section of the bill requires the departments 20 of human services and public health to develop and submit a 21 plan for shifting responsibilities between the two departments. 22 The bill takes effect upon enactment. 23 -6- LSB 1422XC (2) 84 jp/rj 6/ 6