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Iowa Legislature: Interim calendar and briefing
11/25/2009

Iowa Legislative Interim

Calendar and Briefing

Legislative Services Agency Interim No. 17

In This Edition

Calendar

Agendas

Briefings

· Adult Mental Health and Developmental Disabilities (MH/DD) Stakeholder Task Force Workgroup (11/18/09)

· Public Retirement Systems Committee (11/19/09)

Calendar

Wednesday, December 2, 2009

Legislative Health Care Coverage Commission

10:00 a.m., Room 103, Supreme Court Chamber, Statehouse

Tuesday, December 8, 2009

Administrative Rules Review Committee

9:00 a.m., Room 116, Statehouse

Thursday, December 10, 2009

State Government Reorganization Commission

9:00 a.m., Room 103, Supreme Court Chamber, Statehouse

Friday, December 11, 2009

Revenue Estimating Conference

1:00 p.m., Room 116, Statehouse

Thursday, December 17, 2009—TENTATIVE

Government Oversight Committees

9:00 a.m., Room 103, Supreme Court Chamber, Statehouse

Monday, January 11, 2010

Eighty-third General Assembly, 2010 Regular Session Convenes

10:00 a.m., Senate and House of Representatives

Thursday, January 14, 2010—TENTATIVE

Criminal Code Reorganization Study Committee

Time and location to be determined.

Agendas

Legislative Health Care Coverage Commission

Chairperson: David Carlyle

Vice Chairperson: Ted Williams

Location: Room 103, Supreme Court Chamber, Statehouse

Date & Time: Wednesday, December 2, 2009, 10:00 a.m.

Legislative Services Agency Contacts: Ann Ver Heul, Legal Services, (515) 281-3837; Patty Funaro, Legal Services, (515) 281-3040

Tentative Agenda: Discuss reports and recommendations from Commission workgroups and vote on items for the Commission’s January report.

Internet Page: http://www.legis.state.ia.us/aspx/Committees/Committee.aspx?id=484

Administrative Rules Review Committee

Chairperson: Representative Marcella Frevert

Vice Chairperson: Senator Wally Horn

Location: Room 116, Statehouse

Date & Time: Tuesday, December 8, 2009, 9:00 a.m.

Contact Persons: Joe Royce, LSA Counsel, (515) 281-3084; Michael Duster, LSA Counsel, (515) 281-4800

Agenda: Published in the Iowa Administrative Bulletin.

http://www.legis.state.ia.us/aspx/BulletinSupplement/bulletinListing.aspx

State Government Reorganization Commission

Co-chairperson: Senator Staci Appel

Co-chairperson: Representative Mary Mascher

Location: Room 103, Supreme Court Chamber, Statehouse

Date & Time: Thursday, December 10, 2009, 9:00 a.m.

Legislative Services Agency Contacts: Tim McDermott, Legal Services, (515) 281-8090, Tim Whipple, Legal Services, (515) 281-3444

Tentative Agenda: To be announced.

Internet Page: http://www.legis.state.ia.us/aspx/Committees/Committee.aspx?id=487

Revenue Estimating Conference

Location: Room 116, Statehouse

Date & Time: Friday, December 11, 2009, 1:00 p.m.

Internet Page: http://www.legis.state.ia.us/aspx/Committees/REC.aspx?id=156

Government Oversight Committees—TENTATIVE

Senate Chairperson: Senator Rich Olive

House Chairperson: Representative Vicki Lensing

Location: Room 103, Supreme Court Chamber, Statehouse

Date & Time: Thursday, December 17, 2009, 9:00 a.m.

Legislative Services Agency Contacts: Doug Wulf, Fiscal Services, (515) 281-3250; Marcia Tannian, Fiscal Services, (515) 281-7942; Rick Nelson, Legal Services, (515) 242-5822.

Tentative Agenda: To be announced.

Internet Page: http://www3.legis.state.ia.us/ga/committee.do?id=41

Briefings

Adult Mental Health and Developmental Disabilities (MH/DD) Stakeholder Task Force

November 18, 2009

Background. The legislation, (2009 Iowa Acts, H.F. 811 Sec. 56) requires the chairpersons (Senator Jack Hatch and Representative Lisa Heddens) to consult with the ranking members (Senator David Johnson and Representative Dave Heaton) of the Joint Appropriations Subcommittee on Health and Human Services in appointing a task force of stakeholders for the 2009 Legislative Interim to address both funding and services issues associated with the service system administered by counties for adult mental health and developmental disabilities services and report recommendations to the Governor and the General Assembly for action during the 2010 Legislative Session. Due to the current budget situation and funding limitations, the chairpersons and ranking members asked the members of the Joint Subcommittee, particularly those who served on the two related subcommittees during the 2009 Legislative Session, to serve as the task force and hold one meeting during the late fall to receive recommendations from a stakeholder workgroup, formed and facilitated by legislative staff, to develop materials and options and receive input from those interested in MH/DD services for discussion and review at the task force meeting.

Membership. Membership of the stakeholder workgroup consists of two provider representatives, three representatives of the Iowa State Association of Counties (ISAC), three representatives of the Department of Human Services (DHS), three representatives of consumers/advocates (an additional consumer joined the workgroup at the September 23, 2009 meeting), and staff representing the House and Senate Democrat and Republican caucuses and nonpartisan staff. Legislators who are members of the task force, as well as those with an interest in the stakeholder workgroup were invited to attend the stakeholder meetings.

Shift State/County Financing of MH/DD Services. Jennifer Vermeer, Medicaid Director, reviewed an option for the financing of MH/DD services. Currently the counties are responsible for the nonfederal share for certain Medicaid services and for services to non-Medicaid eligible individuals including costs for intermediate care facilities for persons with mental retardation (ICFMRs). The Medicaid waiver services which include services for persons with mental retardation, habilitation, targeted case management, and services provided by the state resource centers and the mental health institutes (MHI). In FY2008-2009, the nonfederal share paid by counties for the Medicaid services was $162.5 million. Counties receive state funding through various MH/DD funding pools to pay for both the nonfederal share for Medicaid services and costs of non-Medicaid services. Due to funding under the federal American Recovery and Reinvestment Act of 2009 (ARRA), the Medicaid nonfederal share amount for both the state and counties has been reduced for fiscal years 2008-2009 through 2010-2011, but as ARRA funds drastically decline and are eliminated in FY2010-2011, there will be a funding challenge or "cliff” effect to address. As more services have become available through Medicaid, county Medicaid costs have grown both at a faster rate than the state payments to counties and county property tax revenues due to the dollar amount cap on the property tax revenues. Currently, Medicaid billings to counties are virtually the same amount as the state appropriations to counties for MH/DD funding, but Medicaid is projected to continue growing. In addressing the increasing responsibility to counties for the nonfederal share for Medicaid, one option is to phase out the county obligation to pay the nonfederal share and the state payments for MH/DD funding. This could be structured so that the Medicaid match is phased down more quickly than the state payments to counties in order to reduce the ARRA cliff coming in FY2010-2011. This approach moves the burden of the growing costs of Medicaid on the state, providing a long-term financing strategy while addressing short-term county shortfalls.

Discussion of Option. County representative, Craig Wood, agreed in principle with the option for the long-term, but noted that if counties are going to rely totally on property taxes for MH/DD costs, the dollar cap on the property tax levy also needs to be lifted. He agreed that eliminating the sending of billings and payments in virtually equal amounts back and forth between the state and counties, and reducing the accounting and other administrative costs would be more efficient, and stated his preference for a phase-down approach, which might be structured to eliminate county responsibility for state resource centers, then the MHIs, then the ICF/MRs, and possibly civil commitment costs. He cautioned that policymakers and the Governor need to address the state's responsibility for the Medicaid match especially in light of discussion with federal authorities that the Medicaid waivers must be applied on a statewide basis. County representative, Karen Walters-Crammond, stated that over the years, counties have asked to have services added to Medicaid and this has been a valuable resource. The Medicaid match has become a significant part of county budgets, but counties are concerned with maintaining local decision making if funding is controlled at the state level. Ms. Vermeer responded that the option presented only relates to the funding, but that local decision making through county points of coordination would be maintained regarding such things as the service array provided. Provider representative, Shelly Chandler, expressed concern regarding the feeling of providers being caught in the middle because of the inconsistencies and inequities in provision of services, and the way reimbursement rates are set. The state initially sets the rates for Medicaid services, but some counties then change the rates based on retrospective reporting. Ms. Walters-Crammond noted that rates do vary from county to county and that there is some room for negotiation on rates. Ms. Chandler reiterated the need for consistency in the rules on rate setting.

States' Approaches to Mental Health and Disability Services. Ted Lutterman, Director of Research Analysis, National Association of State Mental Health Program Directors (NASMHPD) Research Institute, Inc. joined the workgroup by phone to discuss state approaches to providing mental health and disability services. The organization published a report, funded through the federal Substance Abuse and Mental Health Services Administration (SAMHSA) analyzing how states' mental health systems are organized in 2007, and is just wrapping up the newest version for publication. One of the issues addressed in the 2009 report is changes to state mental hospitals as the result of state budget shortfalls. Over the last fifty years, the number of state mental hospitals and their populations have decreased dramatically. However, while some have closed due to the inefficiencies of old facilities and fewer patients, some states have addressed the decline in other ways. In Ohio, the hospitals combined administrative functions, but remained open. Texas has also taken this approach. Twelve other states are replacing their state hospitals with smaller, modern, more efficient facilities. One reason for building smaller facilities is that federal regulations provide that state-operated facilities with over 16 beds that provide services for adults between 21 and 64 years of age are considered Institutes for Mental Disease (IMD) and are not eligible for reimbursement through Medicaid. Because of this limitation, Minnesota closed its state hospitals and instead built several 16-bed facilities around the state to provide acute psychiatric inpatient services. Some of the new facilities were built on the grounds of the former state hospitals and some have not yet been accredited for Medicaid, but this is the goal. Minnesota also still has traditional and forensic hospital services. The changes took places over a three or four-year period and many of the locations have only opened in the last 18 months. Mr. Lutterman agreed to provide more details regarding the changes.

Bill Gardam, DHS representative, noted that Pennsylvania has also closed the state mental hospital which was a five year process. Rhode Island is currently the only state without a state psychiatric hospital. The state now provides care in a 75-bed unit of its university general hospital. Recently, Mississippi's governor recommended closing its state hospital which provides six crisis units and is considered an IMD.

NASMHPD is holding a meeting in early December and will then have results of a survey of the states asking about the impact of the budget crisis on state mental hospitals, whether they are considering closing them, and other specifics.

Another trend is privatizing state hospital services. Missouri has privatized services in several locations with the goal of making services eligible for Medicaid reimbursement. Mr. Lutterman will provide additional details regarding these changes.

In response to a question regarding the changes in funding for institutional vs. community-based services, Mr. Lutterman responded that in 1981 approximately 66 percent of funding was used for state hospitals, and 20 percent for community-based services. Today, the amounts have reversed and the 70 percent is used for community-based services with 20 percent going toward state hospital services. Community mental health is the growth area. With respect to the effect of federal health care reform and mental health parity on state mental health systems, Mr. Lutterman stated that the reforms might not have much of an impact on adults because many of those seeking care are unemployed. With regard to states changing behavioral health rather than mental health systems, Mr. Lutterman responded that they are surveying states this year regarding how they address autism, the majority of states do not include conditions such as autism, Alzheimer's, or traumatic brain injury in their mental health systems, but over 50 percent of the states are considering combining substance abuse and mental health services.

Wisconsin Services. Sue Lerdal, Legislative Services Agency, Fiscal Division, reported on a telephone survey with a representative in Wisconsin. In Wisconsin, the mental health and developmental disabilities systems are divided. Counties are responsible for providing services to individuals with mental illness and developmental disabilities, as well as individuals with substance abuse issues. Counties support these services through state and federal funds and county property tax revenues. However, Wisconsin is phasing in a managed care system for Medicaid funded services. The system was developed over time by adding additional counties to the system. The counties contribute a maintenance of effort amount to the system and the managed care organization makes the decisions to provide care. The state currently operates two institutes for mental disease. Beginning January 1, 2010, counties will be responsible for paying the nonfederal share of the costs for Medicaid-eligible patients.

Acute Care Task Force Update. Kelley Pennington, DHS, provided an update on the work of the Acute Care Task Force, established in the fall of 2008, to design a set of recommendations for submission to the Mental Health and Disability Services Division of DHS, for cross-system planning and implementation of expanded acute care services. The task force is broad-based in its composition and also received input from over 60 statewide stakeholders. The task force developed guiding principles for an acute care system, and determined that the current system was developed by default, not by design. The task force recommendations are forthcoming in December 2009, but the summary provided by Ms. Pennington, includes several recommendations, crisis stabilization centers for adults and child and adolescent crisis stabilization services; school-based services; jail diversion programs; subacute services; the expanded role of designated community mental health centers; psychiatric emergency room screening; and commitment diversion/Code Chapter 229 revisions. Representative Heaton asked that current data be provided on out-of-home placements of children; what can be done to encourage more individuals to be involved in the workforce for the mental health system; and how the recommendations of the task force apply in the rural areas of the state.

Review of Options for Submission to the Legislative Task Force. The workgroup reviewed a document entitled “MH/DD System Reform Options—Draft List for Discussion on 11/18/09” summarizing near-term and long-term system change options to be presented to the Legislative Task Force for consideration. The following elements were discussed:

· The workgroup had previously approved the system transformation values and principles outlined in the strategic plan undertaken by DHS.

· The workgroup discussed the funding distribution formula options and had previously approved the option of disregarding the federal stimulus amount during the time that such funds are available (designated as II(A). In discussion of three other funding formula options the workgroup agreed to eliminate the option relating to averaging the ending balances from the two latest fiscal years, supported the option to allow unused risk pool funding to be used to reduce the waiting lists for state payment program services, noting it is also supported by the Mental Health, Mental Retardation, Developmental Disability, and Brain Injury (MH/MR/DD/BI) Commission, and supported the option authorizing counties to return state funding that would cause an excess ending balance.

· The workgroup discussed the near-system change options identified as the highest priorities in an earlier meeting as well as other options. The workgroup discussed the difference between the option for developing a case rate approach for funding distribution and another option to develop and implement a statewide management plan for MH/DD adult services based on functional assessments and distribute funding through caseload-based budgets. It was determined that the first relates to distribution of funds to the county from the state, and the other relates to distribution of funds by counties for services to individuals.

· The members also discussed the option to reduce the amount of paperwork for Medicaid funded programs. While much of the paperwork is required by federal regulation, the members determined that conversations should continue to work together to improve efficiencies in this area, maximize flexibility, and provide additional education and training for those submitting the paperwork.

· County representative, Patty Erickson-Puttman, expressed that she did not support the higher priority option to shift a county dollar cap to a rate cap because this increases taxes and perpetuates the inequities between the counties. Mr. Wood noted that ISAC supports the shift to a county state cap. He noted that if the counties agree to allow the state to assume the costs of the Medicaid services and counties have to provide funding for this, the counties will not agree to it if there is not a standard levy. Currently, the levy amounts range from 24 cents per $1,000 of property value to $2.80 per $1,000 of property value. Ms. Walters-Crammond suggested that no one option is the answer and that a more comprehensive plan is needed going forward to provide more consistency, equity, and access to services.

Vote on Prioritization of Options. Each nonlegislative member was provided with eight “voting” stickers to identify preferences among 20 possible options. The workgroup voted on prioritization of the options reviewed and further discussed those provisions receiving six or more votes. Those receiving six or more votes include (numbers used correspond to the items list under part II-B of the draft options list):

#1 Have the courts assume the costs of mental health commitments instead of counties. (9 votes)

#2. Have the state pay for all institutional costs with no county match. (9 votes.)

#6. Regionalize certain community-based services to improve the system and avoid the use of more expensive services. (8 votes)

#7. Develop and implement a statewide management plan for MH/DD adult services based on functional assessments and distribute funding through caseload-based budgets administered by the counties or county regions. (6 votes)

#9. Address the disparity between the reimbursement rates paid for private intermediate care facilities for persons with mental retardation (ICFMR) level of care versus the state resource center ICFMRs. (6 votes)

#15. State assumption of all Medicaid nonfederal share costs. (15 votes)

Discussion of Priorities. During discussion of the highest priority options, it was suggested that when combined with the previously approved three high priority options there would be nine options, which is too many for a discussion. With further discussion, the workgroup determined that items #1, #2, and #15 could be combined to reflect the concept of state assumption of certain costs from counties, and then lettering #1, #2, and #15 as a, b, and c under this general concept.

The workgroup agreed that item #7 should be rewritten as a pilot option and that item #9 should be eliminated as a priority with only six votes.

Public Poll on Mental Health. Mr. Wood distributed a recent Des Moines Register poll regarding state government budget cuts in which 44 percent of those polled responded that mental health services should be spared from state budget cuts.

LSA Contacts: Patty Funaro, Legal Services (515) 281-3040; John Pollak, Legal Services, (515) 281-3818

Internet Page: http://www.legis.state.ia.us/aspx/Committees/Committee.aspx?id=502

PUBLIC RETIREMENT SYSTEMS COMMITTEE

November 19, 2009

Co-chairperson: Senator John P. (Jack) Kibbie

Co-chairperson: Representative Mary Mascher

OVERVIEW. The Public Retirement Systems Committee received testimony from the Municipal Fire and Police Retirement System of Iowa (MFPRSI), organizations and individuals concerned with that retirement system, and follow-up presentations from the November 9 meeting concerning the major public retirement systems in the state. The Committee recommended that a proposed interim committee bill be drafted which would be examined at a subsequent meeting of the Committee during the 2010 Legislative Session.

MUNICIPAL FIRE AND POLICE RETIREMENT SYSTEM OF IOWA (MFPRSI)

MFPRSI Staff. Dennis Jacobs, MFPRSI Executive Director, and Donn Jones and Glenn Gahan, Consulting Actuaries, provided background information concerning the retirement system. Mr. Jacobs noted that the fund lost 21.8 percent in value during FY2008-2009. According to the most recent actuarial valuation of the system for that fiscal year, the funded status of the system based upon the market value of assets is 72 percent. Just two years ago, the funded ratio was around 107 percent, highlighting the impact of last year’s significant drop in the market. In addition, based on this actuarial valuation, the required contribution rate from cities beginning FY 2010-2011 will be 19.9 percent. Mr. Gahan then discussed future trends in the actuarial contribution rate, noting that the cities’ contribution rate under a variety of asset return scenarios will likely rise to at least 35 percent of payroll over the next several years.

Iowa League of Cities. The league expressed its concern over the impact of increasing the required contributions from the cities to MFPRSI in the future. The league proposed moving towards a split of the total required contribution rate to the system of 60 percent employer and 40 percent employee. The league also opposes any benefit enhancements to the system.

Iowa State Police Association. The association expressed concern over the increasing use of overtime and noted that the system does not recognize overtime in calculating benefits under the system.

Iowa Professional Firefighters. The association believes the system is working as designed and does not recommend any benefit enhancements at this time.

COMMITTEE RECOMMENDATIONS:

The Committee recommended that a study bill be drafted for review by the Committee which would include the following provisions:

IOWA PUBLIC EMPLOYEES RETIREMENT SYSTEM (IPERS)

1. Create a bona fide retirement exception for members called to state active duty with the National Guard.

2. Extend the bona fide retirement exception for licensed health care professionals for two years.

3. Increase the total contribution rate for IPERS regular service to 13.45 percent beginning July 1, 2011, and allow the system to adjust the rate either up or down by no more than one percentage point per year for all employee classifications under IPERS.

4. Increase the vesting requirement from four to seven years.

5. Calculate retirement benefits using a member's high five years of salary instead of the current high three years.

6. Implement a 6 percent per year reduction in retirement benefits for each year a member retires and receives a retirement allowance prior to age 65 if at the time the member retires the member does not meet the rule of 88 or is not at least 62 years of age with at least 20 years of service.

7. Extend the current purchase of wage credit rules relative to furloughs for IPERS members for an additional year and allow the rules to apply to union bumping rights.

MUNICIPAL FIRE AND POLICE RETIREMENT SYSTEM (MFPRSI)

1. Annually increase the employee contribution rate by 0.5 percentage points for four years beginning July 1, 2010.

2. Adopt the proposed technical statutory changes approved by the MFPRSI board concerning the definition of surviving spouse, knowledge of preexisting conditions, ordinary death benefit elections, rollovers by nonspouse beneficiaries, and compliance with federal military service provisions.

3. Phase out and eventually eliminate the state's contribution to MFPRSI.

4. Beginning July 1, 2010, provide that overtime pay is considered earnable compensation for purposes of MFPRSI.

5. Direct the MFPRSI board to provide specific benefit and other technical statutory changes to the Public Retirement Systems Committee.

PEACE OFFICERS RETIREMENT SYSTEM (PORS)

1. Annually increase the employee contribution rate by 0.5 percentage points for four years beginning July 1, 2010.

2. Adopt the proposed technical statutory changes approved by the PORS board concerning temporary incapacity, disability retirement documentation, purchase of permissive service, calculation of ordinary disability allowance, reemployment after disability, contributions by the state, and hospitalization and medical attention.

3. Beginning July 1, 2010, provide that overtime pay is considered earnable compensation for purposes of PORS.

4. Direct the PORS board to provide specific benefit and other technical statutory changes to the Public Retirement Systems Committee.

Next Meeting. The Committee intends to meet during the 2010 Legislative Session to consider the proposed interim committee bill.

LSA Contacts: Ed Cook, Legal Services, (515) 281-3994; Susan Crowley, Legal Services, (515) 281-3430; Jennifer Acton, Fiscal Services, (515) 281-7846.

Internet Page: http://www.legis.state.ia.us/aspx/Committees/Committee.aspx?id=57




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