SSB 1228 (LSB 1013XG (27) 91)

SENATE/HOUSE FILE _____

BY  (PROPOSED GOVERNOR BUDGET BILL)

A BILL FOR

An Act relating to and making appropriations for veterans and health and human services, and related provisions and appropriations, including aging and disability services, behavioral health, public health, community access and eligibility, health-related programs, reimbursement rates, family well-being and protection, state-operated specialty care, the beer and liquor control fund, and the behavioral health fund, and including effective date and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
DEPARTMENT OF VETERANS AFFAIRS —— FY 2025-2026

    Section 1.  DEPARTMENT OF VETERANS AFFAIRS.  There is appropriated from the general fund of the state to the department of veterans affairs for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amounts, or so much thereof as is necessary, to be used for the purposes designated:
   1.  DEPARTMENT OF VETERANS AFFAIRS ADMINISTRATION
   For salaries, support, maintenance, and miscellaneous purposes:
   ...................................................................... $  1,384,743

   2.  IOWA VETERANS HOME
   For salaries, support, maintenance, and miscellaneous purposes:
   ...................................................................... $  8,234,502

   a.  The Iowa veterans home billings involving the department of health and human services shall be submitted to the department on at least a monthly basis.
   b.  The Iowa veterans home expenditure report shall be submitted monthly to the general assembly.
   3.  HOME OWNERSHIP ASSISTANCE PROGRAM
   For transfer to the Iowa finance authority for the continuation of the home ownership assistance program for persons who are or were eligible members of the armed forces of the United States, pursuant to section 16.54:
   ...................................................................... $  2,700,000
DIVISION II
AGING AND DISABILITY SERVICES —— FY 2025-2026

    Sec. 2.  DEPARTMENT OF HEALTH AND HUMAN SERVICES —— AGING AND DISABILITY SERVICES.  There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated:
   For aging programs for the department of health and human services and area agencies on aging to provide citizens of Iowa who are 60 years of age and older with case management; Iowa’s aging and disabilities resource centers; for the return to community program; for the purposes of chapter 231E, to administer the prevention of elder abuse, neglect, and exploitation program pursuant to section 231.56A, in accordance with the requirements of the federal Older Americans Act of 1965, 42 U.S.C. §3001 et seq., as amended; for the reporting and evaluation of cases of dependent adult abuse pursuant to chapter 235B; and for other services which may include but are not limited to adult day, respite care, chore, information and assistance, and material aid, for information and options counseling for persons with disabilities, and for salaries, support, administration, maintenance, and miscellaneous purposes:
   ...................................................................... $ 19,208,822

   1.  Funds appropriated in this section may be used to supplement federal funds under federal regulations. To receive funds appropriated in this section, a local area agency on aging shall match the funds with moneys from other sources according to rules adopted by the department. Funds appropriated in this section may be used for services not specifically enumerated in this section only if approved by the department as part of an area agency on aging’s area plan.
   2.  Of the funds appropriated in this section, $949,282 shall be used for the family support center component of the comprehensive family support program under chapter 225C, subchapter V.
   3.  Of the funds appropriated in this section, $33,632 shall be used to build community capacity through the coordination and provision of training opportunities in accordance with the consent decree of Conner v. Branstad, No. 4-86-CV-30871 (S.D. Iowa, July 14, 1994).
DIVISION III
BEHAVIORAL HEALTH —— FY 2025-2026

    Sec. 3.  DEPARTMENT OF HEALTH AND HUMAN SERVICES —— BEHAVIORAL HEALTH.  There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated:
   For behavioral health prevention, treatment, and recovery efforts to reduce the prevalence of the use of, provide treatment for, and support recovery from alcohol, tobacco, and substance use and misuse, problem gambling, and other addictive behaviors. Activities shall align with accepted best practice guidance standards for behavioral health including those published by the centers for disease control and prevention and the substance abuse and mental health services administration of the United States department of health and human services for health promotion; universal, selective, and indicated prevention; treatment; and recovery services and supports; and shall include a 24-hour helpline, public information resources, professional training, youth prevention, program evaluation, and efforts at the state and local levels:
   ...................................................................... $ 24,442,347

   1.  Of the funds appropriated in this section, $300,000 shall be used to support the work of the children’s behavioral health system including evidence-based behavioral health prevention, treatment, and recovery services and supports for children and their families pursuant to the intent specified in section 225C.6B, subsection 1.
   2.  Of the funds appropriated in this section, $950,000 shall be used for an integrated substance use disorder managed care system. The department shall maintain the level of mental health and substance use disorder treatment services provided by the managed care contractors. The department shall take the steps necessary to continue the federal waivers as needed to maintain the level of services.
    Sec. 4.  DEPARTMENT OF HEALTH AND HUMAN SERVICES —— SPORTS WAGERING RECEIPTS FUND.  There is appropriated from the sports wagering receipts fund created in section 8.57I, to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for behavioral health prevention, treatment, and recovery efforts to reduce the prevalence of the use of, provide treatment for, and support recovery from alcohol, tobacco, and substance use and misuse, problem gambling, and other addictive behaviors:
   ...................................................................... $  1,750,000
DIVISION IV
PUBLIC HEALTH —— FY 2025-2026

    Sec. 5.  DEPARTMENT OF HEALTH AND HUMAN SERVICES —— PUBLIC HEALTH.  There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated: 
   For programs that support health promotion, protect the health and safety of the public, conduct disease surveillance and investigation to reduce the incidence of morbidity and mortality, serve individuals with chronic conditions including but not limited to cancer, support the Iowa donor registry as specified in section 142C.18, and strengthen the health care delivery system and workforce to improve health outcomes for all Iowans:
   ...................................................................... $ 22,413,883

   1.  Of the funds appropriated in this section, the following amounts are allocated to be used as follows to support the goals of increased access, health system integration, and engagement:
   a.  $600,000 is allocated to the Iowa prescription drug corporation for continuation of the pharmaceutical infrastructure for safety net providers originally established as described in 2007 Iowa Acts, chapter 218, section 108, and for the prescription drug donation repository program created in chapter 135M. Funds allocated under this paragraph shall be distributed in their entirety for the purpose specified on July 1, 2025.
   b.  $374,000 is allocated to free clinics and free clinics of Iowa for necessary infrastructure, statewide coordination, provider recruitment, service delivery, and provision of assistance to patients in securing a medical home inclusive of oral health care. Funds allocated under this paragraph shall be distributed in their entirety for the purpose specified on July 1, 2025.
   c.  $25,000 is allocated to the Iowa association of rural health clinics for necessary infrastructure and service delivery transformation. Funds allocated under this paragraph shall be distributed in their entirety for the purpose specified on July 1, 2025.
   d.  $225,000 is allocated to the Polk county medical society for continuation of the safety net provider patients access to specialty care initiative as described in 2007 Iowa Acts, chapter 218, section 109. Funds allocated under this paragraph shall be distributed in their entirety for the purpose specified on July 1, 2025.
   2.  Of the funds appropriated in this section, $600,000 shall be used for rural psychiatric residencies for residents selected on or before June 30, 2025. 
   3.  The university of Iowa hospitals and clinics under the control of the state board of regents shall not receive indirect costs from the funds appropriated in this section. The university of Iowa hospitals and clinics billings to the department shall be on at least a quarterly basis.
DIVISION V
COMMUNITY ACCESS AND ELIGIBILITY —— FY 2025-2026

    Sec. 6.  DEPARTMENT OF HEALTH AND HUMAN SERVICES —— COMMUNITY ACCESS AND ELIGIBILITY.  There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated:
   To be used for salaries, support, maintenance, and miscellaneous purposes and for family investment program (FIP) assistance in accordance with chapter 239B, and for other costs associated with providing needs-based benefits or assistance including but not limited to maternal and child health, oral health, obesity prevention, the promoting independence and self-sufficiency through employment, job opportunities and basic skills (PROMISE JOBS) program, supplemental nutrition assistance program (SNAP) employment and training, the FIP diversion program, family planning, rent reimbursement, and eligibility determinations for medical assistance, food assistance, and the children’s health insurance program:
   ...................................................................... $ 68,545,138

   1.  Of the child support collections assigned under FIP, the federal share of support collections shall be credited to the child support services appropriation made in this division of this Act. Of the remainder of the assigned child support collections received by child support services, a portion shall be credited to community access and eligibility, and the remaining funds may be used to increase recoveries, to sustain cash flow in the child support payments account, or for technology needs. If child support collections assigned under FIP are greater than estimated or are otherwise determined not to be required for maintenance of effort, the state share of either amount is appropriated to the department for child support services as described in this Act or may be transferred to or retained in the child support payments account.
   2.  Of the funds appropriated in this section, $3,075,000 shall be used for continuation of the department’s initiative to provide for adequate developmental surveillance and screening during a child’s first five years. The funds shall be used first to fully fund the current participating counties to ensure that those counties are fully operational, with the remaining funds to be used for expanding participation to additional counties. The full implementation and expansion shall include enhancing the scope of the initiative through collaboration with the child health specialty clinics to promote the use of developmental surveillance and screening to support healthy child development through early identification and response to both biomedical and social determinants of healthy development by providing practitioner consultation and continuous improvement through training and education, particularly for children with behavioral conditions and needs. The department shall also collaborate with the Medicaid program and the child health specialty clinics to assist in coordinating the activities of the first five initiative into the establishment of patient-centered medical homes developed to improve health quality and population health while reducing health care costs. To the maximum extent possible, funding allocated in this subsection shall be utilized as matching funds for Medicaid program reimbursement.
   3.  Of the funds appropriated in this section, $1,145,102 is allocated to the Iowa commission on volunteer service for programs and grants.
   4.  The university of Iowa hospitals and clinics under the control of the state board of regents shall not receive indirect costs from the funds appropriated in this section. The university of Iowa hospitals and clinics billings to the department shall be on at least a quarterly basis. 

CHILD SUPPORT SERVICES
    Sec. 7.  CHILD SUPPORT SERVICES.  There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated:
   For child support services, including salaries, support, maintenance, and miscellaneous purposes:
   ...................................................................... $ 15,645,242

   1.  Federal access and visitation grant moneys shall be used for services designed to increase compliance with the child access provisions of court orders, including but not limited to neutral visitation sites and mediation services.
   2.  The appropriation made to the department for child support services may be used throughout the fiscal year in the manner necessary for purposes of cash flow management, and for cash flow management purposes the department may temporarily draw more than the amount appropriated, provided the amount appropriated is not exceeded at the close of the fiscal year.
DIVISION VI
MEDICAL ASSISTANCE PROGRAM —— STATE SUPPLEMENTARY ASSISTANCE —— HEALTHY AND WELL KIDS IN IOWA PROGRAM AND OTHER HEALTH-RELATED PROGRAMS —— FY 2025-2026

    Sec. 8.  MEDICAL ASSISTANCE PROGRAM, STATE SUPPLEMENTARY ASSISTANCE, AND HEALTHY AND WELL KIDS IN IOWA PROGRAM.  There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated:
   For medical assistance program reimbursement and associated costs as specifically provided in the reimbursement methodologies in effect on June 30, 2025, except as otherwise expressly authorized by law, consistent with options under federal law and regulations, and contingent upon receipt of approval from the office of the governor of reimbursement for each abortion performed under the program; for the state supplementary assistance program; for the health insurance premium payment program; and for maintenance of the healthy and well kids in Iowa (Hawki) program pursuant to chapter 514I, including supplemental dental services, for receipt of federal financial participation under Tit. XXI of the federal Social Security Act, which creates the children’s health insurance program; and for other specified health-related programs:
   ...................................................................... $ 1,873,384,884

   1.  Of the funds appropriated in this section, $1,808,383,124 is allocated for medical assistance program reimbursement and associated costs.
   a.  Of the funds allocated in this subsection, $800,000 shall be used for the renovation and construction of certain nursing facilities, consistent with the provisions of chapter 249K.
   b.  Of the funds allocated in this subsection, $3,383,880 shall be used for program administration, outreach, and enrollment activities of the state family planning services program pursuant to section 217.41B, and of this amount, the department may use $200,000 for administrative expenses.
   2.  Iowans support reducing the number of abortions performed in our state. Funds appropriated under this section shall not be used for abortions, unless otherwise authorized under this section.
   3.  The provisions of this section relating to abortions shall also apply to the Iowa health and wellness plan created pursuant to chapter 249N.
   4.  Of the funds appropriated in this section, $4,479,762 is allocated for the state supplementary assistance program.
   5.  Of the funds appropriated in this section, $60,521,998 is allocated for maintenance of the Hawki program pursuant to chapter 514I, including supplemental dental services, for receipt of federal financial participation under Tit. XXI of the federal Social Security Act, which creates the children’s health insurance program.

HEALTH PROGRAM OPERATIONS
    Sec. 9.  HEALTH PROGRAM OPERATIONS.  There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated: 
   For health program operations and the autism support program:
   ...................................................................... $ 39,672,838

   1.  The department of inspections, appeals, and licensing shall provide all state matching funds for survey and certification activities performed by the department of inspections, appeals, and licensing. The department of health and human services is solely responsible for distributing the federal matching funds for such activities.
   2.  Of the funds appropriated in this section, a sufficient amount shall be used for the administration of the health insurance premium payment program, including salaries, support, maintenance, and miscellaneous purposes.
   3.  Of the funds appropriated in this section, $750,000 shall be used for the state poison control center. Pursuant to the directive under 2014 Iowa Acts, chapter 1140, section 102, the federal matching funds available to the state poison control center from the department under the federal Children’s Health Insurance Program Reauthorization Act of 2009 allotment shall be subject to the federal administrative cap rule of 10 percent applicable to funding provided under Tit. XXI of the federal Social Security Act and included within the department’s calculations of the cap.
   4.  Unless otherwise provided by law, if a contract for services provided under this section initially entered into during the fiscal year beginning July 1, 2025, and ending June 30, 2026, provides for an annual increase of the cost of services provided under the contract, the annual increase shall not exceed the amount by which the consumer price index for all urban consumers increased during the most recently concluded calendar year. This subsection shall not affect a contract entered into on or before June 30, 2025, that is for a term of more than one year.

HEALTH CARE ACCOUNTS AND FUNDS
    Sec. 10.  PHARMACEUTICAL SETTLEMENT ACCOUNT —— DEPARTMENT OF HEALTH AND HUMAN SERVICES.  There is appropriated from the pharmaceutical settlement account created in section 249A.33 to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated:
   Notwithstanding any provision of law to the contrary, to supplement the appropriation made in this Act for health program operations under the medical assistance program for the same fiscal year:
   ...................................................................... $    234,193
    Sec. 11.  QUALITY ASSURANCE TRUST FUND —— DEPARTMENT OF HEALTH AND HUMAN SERVICES.  Notwithstanding any provision to the contrary and subject to the availability of funds, there is appropriated from the quality assurance trust fund created in section 249L.4 to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, for the purposes designated:
   To supplement the appropriation made in this Act from the general fund of the state to the department of health and human services for medical assistance for the same fiscal year:
   ...................................................................... $111,216,205
    Sec. 12.  HOSPITAL HEALTH CARE ACCESS TRUST FUND —— DEPARTMENT OF HEALTH AND HUMAN SERVICES.  Notwithstanding any provision to the contrary and subject to the availability of funds, there is appropriated from the hospital health care access trust fund created in section 249M.4 to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, for the purposes designated: 
   To supplement the appropriation made in this Act from the general fund of the state to the department of health and human services for medical assistance for the same fiscal year:
   ...................................................................... $ 33,920,554

NURSING FACILITIES —— REIMBURSEMENT METHODOLOGY PROPOSAL
    Sec. 13.  NURSING FACILITIES —— MEDICAID REIMBURSEMENT METHODOLOGY PROPOSAL.
   1.  By April 1, 2026, the department of health and human services shall develop a reimbursement methodology proposal for reimbursement of nursing facilities under the Medicaid program that includes all of the following:
   a.  A base-rate payment component.
   b.  A quality assurance assessment pass-through component.
   c.  A quality assurance add-on component, which includes a fixed fee payment and a quality-based payment.
   2.  The reimbursement methodology proposal shall include recommendations developed by the department of health and human services, in consultation with stakeholders including the Iowa health care association and leadingage Iowa, for specific metrics the department of health and human services will use to determine whether a nursing facility is eligible to receive all or a portion of the quality-based payment portion of the reimbursement to the nursing facility.
   3.  The total state expenditures for reimbursement of nursing facilities under the Medicaid program using the reimbursement methodology proposed in this section shall not exceed the amount appropriated for this purpose for the applicable fiscal year.
DIVISION VII
REIMBURSEMENT RATES

    Sec. 14.  REIMBURSEMENT RATES —— MEDICAL ASSISTANCE, STATE SUPPLEMENTARY ASSISTANCE, HEALTHY AND WELL KIDS IN IOWA, AND OTHER HEALTH-RELATED PROGRAMS.
   1.  Reimbursement for medical assistance, state supplementary assistance, and social service providers and services reimbursed under the purview of the department of health and human services shall remain at the reimbursement rate or shall be determined pursuant to the reimbursement methodology in effect on June 30, 2025, with the exception of the following:
   a.  If reimbursement is otherwise negotiated by contract or pursuant to an updated fee schedule.
   b.  As otherwise provided in this section.
   2.  a.  Notwithstanding any provision of law to the contrary, for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the department of health and human services shall rebase case-mix nursing facility rates beginning July 1, 2025, using the Medicaid cost reports on file for the period ending December 31, 2024, to the extent possible within state funding, including the allocation provided for this purpose in this Act.
   b.  The department of health and human services shall calculate each nursing facility’s case-mix index for the period beginning July 1, 2024, using weighting based on the current patient-driven payment model schedule. Rosters shall be made to show a separate calculation to determine the average case-mix index for a nursing-facility-wide case-mix index, and a case-mix index for the residents of a nursing facility who are Medicaid recipients using all minimum data set reports by the nursing facility for the previous semiannual period using a day weighted calculation.
   3.  For the fiscal year beginning July 1, 2025, Medicaid provider and service rates shall be adjusted to 85 percent of the benchmark rates based on the department’s 2024 Medicaid rate review for the following Medicaid providers:
   a.  Physicians, provider type 02 and 03.
   b.  Dentists, excluding orthodontic services, provider type 04.
   c.  Podiatrists, provider type 05.
   d.  Optometrists, provider type 06.
   e.  Opticians, provider type 07.
   f.  Pharmacy, enrolled to provide medical supplies and equipment, provider type 08.
   g.  Independent laboratories, provider type 10.
   h.  Medical supplies, provider type 12.
   i.  Clinics, provider type 14.
   j.  Physical therapists, provider type 15.
   k.  Chiropractors, provider type 16.
   l.  Audiologists, provider type 17.
   m.  Rehabilitation agencies, provider type 19.
   n.  Community mental health centers, provider type 21.
   o.  Family planning clinics, provider type 22.
   p.  Psychologists, provider type 29.
   q.  Screening centers, provider type 30.
   r.  Occupational therapists, provider type 32.
   s.  Ambulatory surgical centers, provider type 36.
   t.  Certified nurse midwives, provider type 38.
   u.  Certified registered nurse anesthetists, provider type 44.
   v.  Clinical social workers, provider type 48.
   w.  Nurse practitioners, provider type 50.
   x.  Behavioral health services, provider type 62.
   y.  Physician assistants, provider type 68.
   z.  Independent speech pathologists, provider type 69.
   aa.  Public health agencies, provider type 72.
   ab.  Crisis response services, provider type 80.
   4.  For the fiscal year beginning July 1, 2025, reimbursement rates for maternal health providers shall be increased compared to the rates in effect on June 30, 2025, to the extent possible within the additional $420,000 appropriated for this purpose.
   5.  For the fiscal year beginning July 1, 2025, reimbursement rates for certified nurse midwives shall be increased compared to the rates in effect on June 30, 2025, to the extent possible within the additional $2,000 appropriated for this purpose.
   6.  For the fiscal year beginning July 1, 2025, reimbursement shall be provided for doula services within the additional $220,000 appropriated for this purpose.
   7.  For the fiscal year beginning July 1, 2025, the pharmacy dispensing fee shall be adjusted to $11.37, as determined by the cost of dispensing survey, within the allocation provided for this purpose in this Act. The change in dispensing fee shall become effective following federal approval of the Medicaid state plan.
   8.  a.  For the fiscal year beginning July 1, 2025, reimbursement rates for home health agencies shall continue to be based on the Medicare low utilization payment adjustment (LUPA) methodology with state geographic wage adjustments and shall be adjusted to increase the rates to the extent possible within the state funding appropriated.
   b.  For the fiscal year beginning July 1, 2026, and for each fiscal year thereafter, the department shall review the reimbursement rates for home health agencies and pharmacy dispensing fees.
    Sec. 15.  REIMBURSEMENT RATES —— CHILD PROTECTIVE SERVICES.
   1.  For the fiscal year beginning July 1, 2025, the department of health and human services shall increase reimbursement rates to qualified residential treatment program providers to the extent possible within the additional $3,245,594 appropriated for this purpose.
   2.  For the fiscal year beginning July 1, 2025, the department of health and human services shall increase reimbursement rates to shelter care providers to the extent possible within the additional $1,590,842 appropriated for this purpose.
DIVISION VIII
FAMILY WELL-BEING AND PROTECTION —— FY 2025-2026

STATE CHILD CARE ASSISTANCE
    Sec. 16.  STATE CHILD CARE ASSISTANCE.  There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated: 
   For state child care assistance in accordance with section 237A.13:
   ...................................................................... $ 34,983,087

   1.  If the appropriations made for purposes of the state child care assistance program for the fiscal year are determined to be insufficient, it is the intent of the general assembly to appropriate sufficient funding for the fiscal year in order to avoid establishment of waiting list requirements.
   2.  A portion of the state match for the federal child care and development block grant shall be provided as necessary to meet federal matching funds requirements through the state general fund appropriation made for child development grants and other programs for at-risk children in section 279.51.

EARLY INTERVENTION AND SUPPORTS
    Sec. 17.  EARLY INTERVENTION AND SUPPORTS.  There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated:
   For promoting the optimum health status for children and adolescents from birth through 21 years of age, and for families:
   ...................................................................... $ 35,302,034

   1.  Of the funds appropriated in this section, not more than $734,000 shall be used for the healthy opportunities for parents to experience success (HOPES)-healthy families Iowa (HFI) program established pursuant to section 135.106.
   2.  Of the funds appropriated in this section, $4,313,845 is allocated for the FaDSS grant program. Of the funds allocated for the FaDSS grant program in this subsection, not more than 5 percent of the funds shall be used for administration of the grant program.
   3.  Of the funds appropriated in this section, $29,256,799 shall be used for the purposes of the early childhood Iowa fund created in section 256I.11.
   4.  Of the funds appropriated in this section, $1,000,000 shall be used for the purposes of program administration and provision of pregnancy support services through the more options for maternal support program in accordance with section 217.41C.

EARLY CHILDHOOD IOWA INITIATIVE
    Sec. 18.  Section 256I.11, subsection 1, Code 2025, is amended to read as follows:
   1.  a.  An early childhood Iowa fund is created in the state treasury. The moneys credited to the fund are not subject to section 8.33 and moneys in the fund shall not be transferred, used, obligated, appropriated, or otherwise encumbered except as provided by law. Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys deposited in the fund shall be credited to the fund.
   b.  Moneys appropriated to the department for purposes of the early childhood Iowa fund shall not be used to supplant other appropriated moneys, including any of the following:
   (1)  To provide for the payment of child care for an individual otherwise eligible for the state child care assistance program established in section 237A.13.
   (2)  To award a child care scholarship to an individual who has been approved for the state child care assistance program established in section 237A.13.
   (3)  To provide for the payment of preschool tuition for the amount of time a child enrolled in the statewide preschool program for four-year-old children pursuant to chapter 256C receives instruction in a preschool program under chapter 256C.
   2.  Moneys appropriated to the department for purposes of the early childhood Iowa initiative may be used to provide payment for child care for an individual whose income exceeds the income eligibility percentage for the state child care assistance program under section 237A.13.

CHILD PROTECTIVE SERVICES
    Sec. 19.  CHILD PROTECTIVE SERVICES.  There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated: 
   For child, family, and adoption services, and for salaries, support, maintenance, and miscellaneous purposes:
   ...................................................................... $172,151,751

   1.  Of the funds appropriated in this section, $1,717,000 is allocated specifically for expenditure for the fiscal year beginning July 1, 2025, through the decategorization services funding pools and governance boards established pursuant to section 232.188.
   2.  A portion of the funds appropriated in this section may be used to provide other resources based on client need required to support family preservation, emergency client need, or family reunification efforts.
   3.  Of the funds appropriated in this section, a sufficient amount is allocated for foster family care, group foster care maintenance and services, shelter care, child welfare emergency services, qualified residential treatment programs, and supervised apartment living contracts.
   4.  Federal funds received by the state during the fiscal year beginning July 1, 2025, as the result of the expenditure of state funds appropriated during a previous state fiscal year for a service or activity funded under this section, are appropriated to the department to be used as additional funding for services and purposes provided for under this section. Notwithstanding section 8.33, moneys received in accordance with this subsection that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for the purposes designated until the close of the succeeding fiscal year.
   5.  a.  Of the funds appropriated in this section, $748,000 is allocated for the payment of the expenses of court-ordered services provided to children who are under the supervision of the department, which expenses are a charge upon the state pursuant to section 232.141, subsection 4.
   b.  Notwithstanding chapter 232 or any other provision of law to the contrary, a district or juvenile court shall not order any service which is a charge upon the state pursuant to section 232.141 if the court-ordered services distribution amount is insufficient to pay for the service.
   6.  Of the funds appropriated in this section, $1,658,000 shall be used for the child protection center grant program for child protection centers located in Iowa in accordance with section 135.118. The grant amounts under the program shall be equalized so that each center receives a uniform base amount of $245,000, and so that the remaining funds are awarded through a funding formula based upon the volume of children served. To increase access to child protection center services for children in rural areas, the funding formula for the awarding of the remaining funds shall provide for the awarding of an enhanced amount to eligible grantees to develop and maintain satellite centers in underserved regions of the state.
   7.  Of the funds appropriated in this section, $4,359,500 is allocated for the preparation for adult living program pursuant to section 234.46.
   8.  Of the funds appropriated in this section, up to $227,000 shall be used for the public purpose of continuing a grant to a nonprofit human services organization, providing services to individuals and families in multiple locations in southwest Iowa and Nebraska for support of a project providing immediate, sensitive support and forensic interviews, medical exams, needs assessments, and referrals for victims of child abuse and their nonoffending family members.
   9.  Of the funds appropriated in this section, a portion may be used for family-centered services for purposes of complying with the federal Family First Prevention Services Act of 2018, Pub. L. No. 115-123, and successor legislation.
   10.  a.  Of the funds appropriated in this section, a sufficient amount is allocated for adoption subsidy payments and related costs. 
   b.  Any funds allocated in this subsection remaining after the allocation under paragraph “a” are designated and allocated as state savings resulting from implementation of the federal Fostering Connections to Success and Increasing Adoptions Act of 2008, Pub. L. No. 110-351, and successor legislation, as determined in accordance with 42 U.S.C. §673(a)(8), and shall be used for post-adoption services and for other purposes allowed under these federal laws, Tit. IV-B or Tit. IV-E of the federal Social Security Act.
   11.  Of the funds appropriated in this section, a sufficient amount is allocated to support training needs for child welfare providers and to address disproportionality within the child welfare system.
   12.  If a separate funding source is identified that reduces the need for state funds within an allocation under this section, the allocated state funds may be redistributed to other allocations under this section for the same fiscal year.
DIVISION IX
STATE-OPERATED SPECIALTY CARE —— FY 2025-2026

    Sec. 20.  STATE-OPERATED SPECIALTY CARE.  There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated:
   For salaries, support, maintenance, and miscellaneous purposes at institutions under the jurisdiction of the department of health and human services:
   ...................................................................... $102,343,507

   1.  The department shall utilize the funds appropriated in this section as necessary to maximize bed capacity and to most effectively meet the needs of the individuals served.
   2.  Of the amount appropriated in this section, the following amounts are allocated to each institution as follows:
   a.  For the state mental health institute at Cherokee:
   ...................................................................... $ 19,696,259

   b.  For the state mental health institute at Independence:
   ...................................................................... $ 24,379,570

   c.  For the civil commitment unit for sexual offenders at Cherokee:
   ...................................................................... $ 18,942,529

   d.  For the state resource center at Woodward:
   ...................................................................... $ 14,165,221

   e.  For the state resource center at Glenwood:
   ...................................................................... $  5,296,279

   f.  For the state training school at Eldora:
   ...................................................................... $ 19,863,649
DIVISION X
ADMINISTRATION AND COMPLIANCE —— FY 2025-2026

    Sec. 21.  ACCOUNTABILITY, COMPLIANCE, AND PROGRAM INTEGRITY.  There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated:
   For accountability, compliance, and program integrity, including salaries, support, maintenance, and miscellaneous purposes:
   ...................................................................... $ 21,906,483

   1.  Of the funds appropriated in this section, $200,000 shall be transferred to and deposited in the Iowa ABLE savings plan trust administrative fund created in section 12I.4, to be used for implementation and administration activities of the Iowa ABLE savings plan trust.
   2.  Of the funds appropriated in this section, $2,602,312 shall be used for foster care review and the court appointed special advocate program, including for salaries, support, maintenance, and miscellaneous purposes.
   3.  Of the funds appropriated in this section, $1,148,959 shall be used for the office of long-term care ombudsman for salaries, support, administration, maintenance, and miscellaneous purposes.
   4.  For the fiscal year beginning July 1, 2025, and ending June 30, 2026, the department of health and human services may utilize the moneys appropriated from the general fund of the state to the department in this Act for up to 4,156.00 full-time equivalent positions. The department shall report to the general assembly by December 15, 2025, the distribution of the approved number of full-time equivalent positions across the organizational divisions of the department.
DIVISION XI
DEPARTMENT OF HEALTH AND HUMAN SERVICES TRANSFERS, CASH FLOW, AND NONREVERSIONS —— FY 2025-2026

    Sec. 22.  DEPARTMENT OF HEALTH AND HUMAN SERVICES TRANSFERS AND CASH FLOW.
   1.  The department of health and human services may transfer funds appropriated in this Act to support continuing alignment efforts, to maximize federal support in accordance with the department’s federal costs allocation plan, and for resources necessary to implement and administer the services for which funds are provided. The department shall report any transfers made pursuant to this subsection to the general assembly.
   2.  If the savings to the appropriations made for the Medicaid program from ongoing cost management efforts exceed the associated costs for the fiscal year, the department may transfer any savings generated for the fiscal year due to cost management efforts to the appropriations made in this Act for health program operations or for accountability, compliance, and program integrity to defray the costs associated with implementation of the cost management efforts.
   3.  The department may transfer funds appropriated for child protective services to pay the nonfederal share costs of services reimbursed under the medical assistance program, state child care assistance program, or the family investment program which are provided to children who would otherwise receive services paid under the appropriation for child protective services.
   4.  The department may transfer funds from the temporary assistance for needy families block grant to the federal social services block grant appropriation, and to the child care and development block grant appropriation, in accordance with federal law.
   5.  To the extent the department determines that moneys appropriated under this Act or allocated for a specific purpose under this Act will remain unencumbered or unobligated at the close of the fiscal year, such unencumbered or unobligated moneys may be used in the same fiscal year for any other purpose for which the moneys appropriated may be used, or for any other allocation within the same appropriation.
   6.  To the extent the department determines that moneys appropriated under this Act will remain unencumbered or unobligated at the close of the fiscal year or that services will not be impacted, the department may utilize up to $3,000,000 of such unencumbered or unobligated moneys appropriated to develop and support the thrive Iowa program, a closed-loop referral system utilizing a navigator model, that acts as the connection point to link Iowans on an individualized path to prosperity and self-sufficiency to available resources in all sectors of the community.
    Sec. 23.  DEPARTMENT OF HEALTH AND HUMAN SERVICES NONREVERSIONS.
   1.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state and the temporary assistance for needy families block grant to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, for the purposes of the FaDSS grant program, that remain unencumbered or unobligated at the close of the fiscal year shall not revert, but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
   2.  Notwithstanding section 8.33, of the moneys appropriated from the general fund of the state, the quality assurance trust fund, and the hospital health care access trust fund to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, for the purposes of the medical assistance program, the amount that is in excess of actual expenditures for the medical assistance program that remains unencumbered or unobligated at the close of the fiscal year shall not revert, but shall remain available for expenditure for the medical assistance program until the close of the succeeding fiscal year.
   3.  Notwithstanding section 8.33, and notwithstanding the nonreversion amount limitation specified in section 222.92, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, for the purposes of state-operated specialty care that remain unencumbered or unobligated at the close of the fiscal year shall not revert, but shall remain available for expenditure for the purposes designated for subsequent fiscal years. 
   4.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, for the commission on volunteer service for purposes of the Iowa state commission grant program that remain unencumbered or unobligated at the close of the fiscal year shall not revert, but shall remain available for expenditure for the purposes designated for subsequent fiscal years.
   5.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, and allocated for rural psychiatric residencies to annually fund eight psychiatric residents who will provide mental health services to underserved areas of the state that remain unencumbered or unobligated at the close of the fiscal year shall not revert, but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
   6.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, and allocated for adoption subsidy payments and related costs or for post-adoption services and related allowable purposes that remain unencumbered or unobligated at the close of the fiscal year shall not revert, but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
   7.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, and allocated for the community access and eligibility appropriation that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated or are appropriated to the department for any purpose described in this division of this Act or used as necessary to enhance agency accountability, program integrity, compliance, and efficiency, until the close of the succeeding fiscal year.
   8.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, and allocated for child care assistance that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
   9.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, and allocated for the more options for maternal support program that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
   10.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, and allocated for child protective services that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
   11.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, and allocated for audiological services that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
   12.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2025, and ending June 30, 2026, and allocated for early childhood Iowa that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
DIVISION XII
DEPARTMENT OF HEALTH AND HUMAN SERVICES PRIOR APPROPRIATIONS AND OTHER PROVISIONS

THRIVE IOWA PROGRAM CLOSED-LOOP REFERRAL SYSTEM
    Sec. 24.  2024 Iowa Acts, chapter 1157, section 21, subsection 6, is amended to read as follows:
   6.  To the extent the department determines that moneys appropriated under this Act will remain unencumbered or unobligated at the close of the fiscal year or that services will not be impacted, the department may utilize up to $3,000,000 of such unencumbered or unobligated moneys appropriated to develop and support the thrive Iowa program, a closed-loop referral system utilizing a navigator model, that acts as the connection point to link Iowans on an individualized path to prosperity and self-sufficiency to available resources in all sectors of the community.  Notwithstanding section 8.33, any moneys utilized for this purpose shall not revert but shall remain available for expenditure for the purposes designated until such moneys are fully expended.

COMMUNITY ACCESS AND ELIGIBILITY
    Sec. 25.  2024 Iowa Acts, chapter 1157, section 22, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2024, and ending June 30, 2025, and allocated for community access and eligibility that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated, or are appropriated to the department for any purpose described in this division of this Act or to be used as necessary to enhance the department’s accountability, program integrity, compliance, and efficiency, until the close of the succeeding fiscal year.

CHILD CARE ASSISTANCE
    Sec. 26.  2024 Iowa Acts, chapter 1157, section 22, is amended by adding the following new subsection:
   NEW SUBSECTION.  8.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2024, and ending June 30, 2025, and allocated for child care assistance that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.

MORE OPTIONS FOR MATERNAL SUPPORT PROGRAM
    Sec. 27.  2024 Iowa Acts, chapter 1157, section 22, is amended by adding the following new subsection:
   NEW SUBSECTION.  9.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2024, and ending June 30, 2025, and allocated for the more options for maternal support program that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.

CHILD PROTECTIVE SERVICES
    Sec. 28.  2024 Iowa Acts, chapter 1157, section 22, is amended by adding the following new subsection:
   NEW SUBSECTION.  10.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2024, and ending June 30, 2025, and allocated for child protective services that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.

AUDIOLOGICAL SERVICES
    Sec. 29.  2024 Iowa Acts, chapter 1157, section 22, is amended by adding the following new subsection:
   NEW SUBSECTION.  11.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2024, and ending June 30, 2025, and allocated for audiological services that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.

EARLY CHILDHOOD IOWA
    Sec. 30.  2024 Iowa Acts, chapter 1157, section 22, is amended by adding the following new subsection:
   NEW SUBSECTION.  12.  Notwithstanding section 8.33, moneys appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2024, and ending June 30, 2025, and allocated for early childhood Iowa that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
    Sec. 31.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 32.  RETROACTIVE APPLICABILITY.  This division of this Act applies retroactively to July 1, 2024.
DIVISION XIII
BEER AND LIQUOR CONTROL FUND —— BEHAVIORAL HEALTH FUND

    Sec. 33.  2024 Iowa Acts, chapter 1157, is amended by adding the following new section:
   NEW SECTION.  SEC. 4A.  IN LIEU OF STANDING APPROPRIATION.  The moneys appropriated and allocated in this division of this Act for purposes of treatment and prevention of substance use and misuse and addictive behaviors are in lieu of the standing appropriation to the department of health and human services pursuant to section 123.17, subsection 5, for the fiscal year beginning July 1, 2024.
    Sec. 34.  2024 Iowa Acts, chapter 1161, section 14, is amended by striking the section and inserting in lieu thereof the following:
   SEC. 14.  Section 123.17, subsection 5, Code 2024, is amended to read as follows:
   5.  After any transfer provided for in subsection 3 is made, the department shall transfer into a special revenue account in the general fund of the state, a sum of money at least equal to seven percent of the gross amount of sales made by the department from the beer and liquor control fund on a monthly basis but not less than nine million dollars annually. Of the amounts transferred, two one million dollars, plus an additional amount determined by the general assembly, shall be appropriated to the department of health and human services for use by the staff who administer the comprehensive substance use disorder program under chapter 125 for substance use disorder treatment and prevention programs shall be transferred to the behavioral health fund established under section 225A.7. Any amounts received in excess of the amounts appropriated to the department of health and human services for use by the staff who administer the comprehensive substance use disorder program under chapter 125 transferred to the behavioral health fund shall be considered part of the general fund balance.
    Sec. 35.  EFFECTIVE DATE.  The following, being deemed of immediate importance, takes effect upon enactment:
   The section of this division of this Act amending 2024 Iowa Acts, chapter 1157, section 3.
    Sec. 36.  RETROACTIVE APPLICABILITY.  The following applies retroactively to July 1, 2024.
   The section of this division of this Act amending 2024 Iowa Acts, chapter 1157, section 3.
DIVISION XIV
REPORT ON NONREVERSION OF FUNDS

    Sec. 37.  REPORT ON NONREVERSION OF FUNDS.  The department of health and human services shall report the expenditure of any moneys for which nonreversion authorization was provided for the fiscal year beginning July 1, 2024, and ending June 30, 2025, to the general assembly on a quarterly basis beginning October 1, 2025.
DIVISION XV
EMERGENCY RULES AND REPORTS

    Sec. 38.  EMERGENCY RULES.
   1.  If necessary to comply with federal requirements including time frames, or if specifically authorized by a provision of this Act, the department of health and human services or the mental health and disability services commission shall adopt administrative rules under section 17A.4, subsection 3, and section 17A.5, subsection 2, paragraph “b”, to implement the applicable provisions of this Act. The rules shall be effective immediately upon filing unless a later date is specified in the rules. Any rules adopted in accordance with this section shall also be published as a notice of intended action as provided in section 17A.4.
   2.  If during a fiscal year, the department of health and human services is adopting rules in accordance with this section or as otherwise directed or authorized by state law, and the rules will result in an expenditure increase beyond the amount anticipated in the budget process or if the expenditure was not addressed in the budget process for the fiscal year, the department shall notify the general assembly and the department of management concerning the rules and the expenditure increase. The notification shall be provided at least thirty calendar days prior to the date notice of the rules is submitted to the administrative rules coordinator and the administrative code editor.
    Sec. 39.  REPORTS.  Unless otherwise provided, any reports or other information required to be compiled and submitted under this Act during the fiscal year beginning July 1, 2025, shall be submitted on or before the date specified for submission of the reports or information.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill makes appropriations from the general fund of the state to the department of veterans affairs and to the department of health and human services (HHS) for fiscal year 2025-2026. The appropriations from the general fund of the state to the department of veterans affairs include appropriations for administration, the Iowa veterans home, and the home ownership assistance program. The appropriations from the general fund of the state to HHS include appropriations for aging and disability services; behavioral health; public health; community access and eligibility including for child support services; the medical assistance program, state supplementary assistance, the healthy and well kids in Iowa (Hawki) program, and other specified health-related programs including health program operations; reimbursement rates; family well-being and protection including state child care assistance, early intervention and supports, and child protective services; state-operated specialty care; and administration and compliance. The bill also makes appropriations to HHS from the sports wagering receipts fund, the pharmaceutical settlement account, the quality assurance trust fund, and the hospital health care access trust fund. The bill transfers money from the beer and liquor control fund to the behavioral health fund.
   The bill requires HHS to develop a reimbursement methodology proposal for reimbursement of nursing facilities under the medical assistance program. The bill limits how moneys appropriated to the early childhood Iowa fund shall be used by HHS.
   The bill includes transfer, cash flow, and nonreversion provisions, and emergency rulemaking authority and reporting requirements.