Gov. Reynolds proposes fix to Iowa’s splintered mental health system. Will it help?

• Iowa Gov. Kim Reynolds is proposing to streamline Iowa's treatment networks for mental health and substance use issues.
• Currently, the networks are made up of 32 regions — 13 for mental health and 19 for substance use issues.
• The proposal calls for seven unified Behavioral Health Districts, answering advocates' calls to treat these issues under combined funding streams.
• Advocates say the state still must address fundamental issues like low Medicaid reimbursement rates that hinder access to services.

As state lawmakers weigh Gov. Kim Reynolds’ proposal to unify Iowa’s splintered treatment systems for mental health and substance abuse, local advocates say they welcome the opportunity to streamline the networks and improve care to Iowans grappling with both issues simultaneously.

But some worry that the proposal does not go far enough to address underlying issues that they say threaten these services in Iowa.

Currently, Iowa has separate treatment networks: one that provides mental health services and another that provides substance use disorder care. Reynolds’ proposal, which she unveiled during her annual condition of the state address in January, would establish new districts that provide health care services for both — a change advocates favor because the issues often overlap.

Linn and Johnson counties would be in different districts if the bill passes. The counties are currently within the same mental health region, but different substance use districts.

Advocates support a treatment system that recognizes the connection between mental health and substance use issues. But some worry these changes under Reynolds’ proposal fail to recognize the root problem hindering access to care: the billing mechanisms and low Medicaid reimbursement rates used to provide these services.

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After the state created regions more than 10 years ago, Linn County Supervisor Ben Rogers, the county’s representative on the regional mental health governing board, said the system started to stabilize. He and other advocates said they have more questions than answers regarding how services such as mental health access centers would be affected by another shake-up of Iowa’s behavioral health system.

“It feels like a hard reset and it took us a long, long time to get to a place where we were making advancements in funding and providing services,” Rogers said. “We’re starting at the beginning again. We will adapt and do what we can to provide those critical services.”

Ryan Crane is executive director of the Iowa chapter of the National Alliance on Mental Illness, or NAMI. In an emailed response to questions from The Gazette, Crane said NAMI agrees there are gaps and barriers to accessing Iowa’s mental health system.

“Iowans are waiting too long to access services across the continuum of care, from early interventions like community-based therapy, to intensive treatment options like inpatient psychiatric care. Iowans often don’t know where to turn for help. The system can be difficult to navigate,” Crane said. “We believe the alignment legislation is a step in the right direction toward creating consistency for Iowans and accountability for the system as a whole.”

System ‘thrives on sustainability’ of funding

Under the current system, Iowa has 13 Mental Health and Disability Service regions that provide care for people with mental health issues and intellectual disabilities. There are 19 Integrated Provider Networks that address substance use disorder and gambling addiction.

This bill proposes a new network of seven Behavioral Health Districts under the Department of Health and Human Services. Those districts would handle prevention, education, treatment, recovery and crisis services related to both mental health and substance use disorders.

Disability services provided by the state’s Mental Health and Disability Service network would be moved to the state’s Aging and Disability Services.

The state would use a bidding process to select groups to administer the seven new regions. These organizations could be the existing agencies that oversee mental health regions, or another public or private entity in the district.

Mae Hingtgen, chief executive officer of the East Central Mental Health/Disability Service Region that includes Linn and Johnson counties, said the region intends to submit a proposal to be an administrator.

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Hingtgen appreciated that the governor’s proposal would allow for dual treatment planning for people with co-occurring mental health and substance use issues, which isn’t possible through the current system.

Some uncertainty remains as to the amount of funding that would come with the proposed changes. Hingtgen said HHS has indicated that current regional funding would continue, and the intention is to add funding so regions can provide more comprehensive services.

Johnson County Supervisor Rod Sullivan, the county’s representative on the regional governing board, said the possibility of combining these funding streams appeals to him, but he remained skeptical without more clarity.

“It feels like a lot of what you’ve worked for is getting pulled apart,” Sullivan said. “On the other hand, I can take an optimistic view and say that they’re going to take care of some long-standing problems here … I have to see proof of the money is actually flowing to the services that are needed.”

Molly Severn, the legislative liaison for Reynolds’ office, last month told lawmakers that millions in unspent funds for Iowa’s mental health regions are evidence the current system is inefficient.

Last year, for instance, the East Central Mental Health Region risked losing millions if it did not spend a surplus. HHS allocates state tax dollars to the regions and state lawmakers every year set a fund balance that regions must carry by the end of the budget year, and retain. But if regions carry too much surplus, HHS withholds further dollars that could have gone to providers.

Regions that don’t spend funds in excess of this balance return the money to an incentive fund that’s used by other regions based on need. Regional governing board members have blamed low Medicaid reimbursement rates, flawed billing mechanisms and the constantly changing fund balance for challenging their ability to strategically spend dollars to meet local needs.

“The mental health and substance use system thrives on sustainability and predictability of funding,” Rogers said. “Each year there are new and competing legislative requirements that affect the ability for regions to adequately spend down the dollars that they’re given.”

Reynolds spokesman Kollin Crompton said the reduction in funds regions have been allowed to maintain in their fund balances was intended to “address the peculiarity of having multiple regions with significant fund balances while there are significant systemic needs going unaddressed.”

Crane, with NAMI-Iowa, applauded that funding and the state Health and Human Services Department’s new process for reviewing Medicaid rates on a regular schedule.

“The system as a whole absolutely needs more resources across the continuum of care,” Crane said. “We are hopeful that this new practice (of regularly reviewing Medicaid rates) will result in timely and significant rate increases where and when they are needed.”

Advocates concerned about core services

Rogers and other advocates said they were concerned the bill in its current form does not specify core services — the requirements for minimum service levels for Iowans regardless of where they’re located.

Core services include access centers, 24-hour crisis response, inpatient and outpatient mental health treatment, crisis stabilization residential or community-based services and more.

If lawmakers sunset existing language on required core services, Rogers said he was unsure if these new districts would have greater of less flexibility to fund mental health access centers, which provide care to anyone experiencing a mental health or substance use crisis.

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Reynolds’ spokesman said core services will be included in an amendment to the governor’s proposal.

“Amendments currently under discussion would outline required services to include prevention, early intervention, treatment, recovery support and crisis services,” Crompton said in an email to The Gazette. “The services will be defined in the state plan for behavioral health. As the system makes its transition from the current state, continuity of care provisions will ensure that individuals continue to receive care and providers continue to be reimbursed for their services.”

As for access centers, Crompton said the facilities “have been an important development in Iowa mental health system and will continue to be important part of the future system so Iowans can access services in their community.” Districts will create a plan based on the needs of that specific district.

As lawmakers have stripped local control, Sullivan said, he worried these new districts would have little authority over how these services are delivered or which services are delivered.

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When the state shifted to a regional system, Rogers said this change was seen as “an arranged marriage of the nine member counties” as officials within the region built trust and respect for each other’s counties and needs.

Linn and Johnson County officials are advocating for the counties to be together in the new Behavioral Health Districts. With two access centers located about 30 miles apart and citizens from both counties accessing both, Rogers said the relationships built over time have improved Iowans’ access to services within the region.

“Breaking up the region and regional partners will have an impact,” Rogers said. “That trust and respect is hard to build and hard to maintain, and allows us to have difficult conversations and navigate those more fluidly than with brand-new partners. This is a new arranged marriage and we’ll have to figure out that relationship as well.”

Having two fully functioning brick-and-mortar access centers has been a “huge benefit to individuals in our area experiencing a crisis,” Linn County Mental Health Access Center Director Erin Foster said. If the Linn center is at capacity, patients can potentially use Johnson County’s GuideLink center to seek treatment or vice versa.

The two facilities have mirrored policies and procedures so that if someone comes in, services are nearly identical, she said.

If the bill clearly defines these services, Hingtgen said all administrative organizations would have to make these services available. If these organizations have discretion over what services are offered, she said the impact to services could be significant.

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“The footprint of our map might change but that doesn’t mean we’re still not committed to Iowans and the services we provide Iowans,” Hingtgen said. “ … This is an opportunity for us in Iowa to become more sophisticated in how we deliver behavioral health services.”

Crompton, the governor’s spokesman, did not directly respond to a question about whether the governor’s proposed map could be amended.

“It is an expectation that all districts are working together on a statewide basis and all will be guided and responsible for executing on the statewide plan,” Crompton said. “The administrative work needs to be approached in a way that is equitable.”

‘Rearranging deck chairs on the Titanic’

Some advocates worried that while state-set Medicaid reimbursement rates stay low — with most people who are receiving mental health services on Medicaid — providers would remain hamstrung in efforts to expand services and recruit and retain staff.

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“People are making less money working with our vulnerable residents with mental health needs than if they just went to work for McDonald’s or Taco Bell,” Sullivan said. “We’re not getting the quality of people we need and they’re not staying. They’re not getting the pay and benefits commensurate with the importance of the job they’re doing.

“Until the state of Iowa fixes that, nothing we do here will matter. We're just rearranging deck chairs on the Titanic because that’s the big payer,” he said.

Foster said worker shortages affect the Linn County access center’s operations daily and delayed its expansion to 24/7 operating hours until December. The center first opened in March 2021 at 501 13th St. NW, Cedar Rapids.

There’s a lack of nurses available to provide care, she said, and the prescriber shortage affects how quickly the center can help individuals get medication or do a full mental health evaluation. Without that, barriers remain to accessing other services.

“Until the state of Iowa fixes that, nothing we do here will matter. We're just rearranging deck chairs on the Titanic because that’s the big payer.” — Rod Sullivan, Johnson County supervisor

“When it comes to workforce issues in the mental health and substance use world, unless we start addressing the billing mechanisms at play that allow organizations to actually be reimbursed for the services that are being done and for the staff needed to do the services, the workforce shortage in this area is going to continue,” Foster said.

Asked if the governor’s proposal would address the gap left after Medicaid-covered costs, Crompton pointed to $13 million in funding appropriated by the state last year to increase Medicaid reimbursement rates for mental health therapy and residential treatment for substance abuse and psychiatric medical institutions for children in Iowa.

Hingtgen said the bill intends to make services more accessible to Iowans and incentivize the creation or expansion of providers. It “would create more efficiencies within our system where we could use current workforce more effectively than maybe what is happening right now,” she said.

The bill doesn’t spell out a path to do so, Hingtgen said, but “will to get us to a better system in Iowa.”

Professionals in the field will need to still commit to supporting providers’ workforce needs, she said. The East Central Region has aimed to do that by offering its provider network grants to support workforce recruitment and retention, an effort that started in 2021.

“Just changing the map and changing expectations does not necessarily solve our workforce issues,” Hingtgen said.

Crompton, the governor’s spokesman, said the proposal will reduce administrative burden and red tape in the current system, and will make more funding available to support providers, including training and technical assistance, streamlining of licensure certification and accreditation, additional funding for prevention and recovery services and improved systems that support crisis response.

“Improving systems allows providers to focus on their practice instead of navigating a maze of administrative red tape,” Crompton said.

Where the governor’s proposal stands

Reynolds’ proposal has been moving through both chambers of the Iowa Legislature, in the form of twin companion bills, Senate File 2354 and House File 2509. Both bills were approved by their respective chamber’s policy committees on health and human services, and now are working their way through the House and Senate budget committees.

During a subcommittee hearing on the bill in the House, the legislator running the hearing said an amendment is planned to address some of the issues raised by advocates, but that details of that amendment were not yet available.

Comments: (319) 398-8494; marissa.payne@thegazette.com