Iowa agrees to pay $2M to attorneys in children’s Medicaid settlement

DES MOINES — The state will pay nearly $2 million in attorney fees as part of a settlement agreement in a lawsuit against the Iowa Department of Health and Human Services over mental health services for children.

The Iowa Appeal Board unanimously approved the state’s payment at its Tuesday meeting.

The 2023 lawsuit claimed the State of Iowa for decades had “disregarded the lack of mental and behavioral health services” and had failed to provide “intensive home and community-based services” to Medicaid-eligible children as required by federal law.

The state in October of 2023 agreed to settle with the plaintiffs — three unnamed Iowa children who were represented by three advocacy groups — and earlier this year presented its plan to ensure the delivery of home and community-based services to the state’s most vulnerable children with mental and behavioral health care needs.

A federal court in May gave final approval to the settlement agreement.

The State Appeal Board, which signs off on settlement payments involving state agencies, at its Tuesday meeting approved $1.95 million in plaintiffs’ attorney fees and a cap of $160,000 per year for attorney fees related to the monitoring and validation of the state’s compliance with the settlement agreement.

The plaintiffs — Disability Rights of Iowa, Children’s Rights, the National Health Law Program, and the Chicago-based law firm Ropes & Gray — had originally requested $2.7 million in attorney fees, and the two sides negotiated the figure, according to state documents.

Of the attorney fees, Children’s Rights will receive roughly $1 million, National Health Law Program $310,000, Disability Rights Iowa $433,000, and Ropes & Gray $142,000.

Those groups worked on the settlement agreement with the Iowa Department of Health and Human Services, under Director Kelly Garcia, and Iowa Gov. Kim Reynolds.

Under the settlement agreement, Iowa Health and Human Services will be required to provide mental and behavioral health care services to Medicaid-eligible children in Iowa, including intensive care coordination, intensive in-home and community therapeutic services, and mobile crisis intervention and stabilization services.

The agency also will be required to adopt a new screening and assessment process to ensure eligible Iowa children under the age of 21 with serious emotional and behavioral health conditions are receiving the required services. The settlement includes a specific framework for establishing accountability systems and timelines for rolling out new services.

Lee Des Moines Bureau Chief Maya Marchel Hoff contributed to this report.

Comments: (515) 355-1300, erin.murphy@thegazette.com

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