State funding for year beginning July 1 could be $2 million short and funding in later years estimated to be $800,000 less
By Lauris Olson
(May 17, 2012 – 1:30 p.m.) Story County will begin working through administrative problems with its current community mental health center and a possible shortage in funding for future mental health services.
The Story County Board of Supervisors will talk about both issues during their Tuesday, May 22, meeting. While both deal with mental health services, one issue has no bearing on the other.
The topics are likely to draw heated discussion. The first, a formal resolution to ask Iowa State Auditor David Vaudt to audit the Richmond Center’s books, probably won’t take long.
The second issue – the Iowa General Assembly’s restructure of the state’s mental health payment system – could mean a change in the services available and a waiting list for new clients.
State Auditor of Iowa
Supervisor Rick Sanders said in a telephone interview yesterday that he and two Story County employees and representatives from the City of Ames, Iowa State University’s Government of the Student Body, and United Way of Story County met Tuesday with Vaudt.
They stated their concerns about some of the Richmond Center administration’s funding decisions and the overdue audit of a private auditing firm. Vaudt mostly listened, said Sanders.
“I came away from the meeting believing that it is reasonable that we are concerned,” said Sanders. “My impression is that there are some red flags that I believe he sees and I believe he feels that it would be worthy to look into.”
So the supervisors next Tuesday will use a provision in state law that allows them to request the Iowa auditor’s office to intervene.
$800,000 per year deficit
Discussing the financial impact of the legislature’s mental health redesign on Story County will take much longer.
The new mental health system will do away with most individual county mental health funding departments, reorganizing them into larger regional delivery systems. The state will take over billing and payments for all Medicaid patients and each county will now have the same amount per county resident - $47.28 - to spend on mental health services.
Counties that have been spending less that the $47.28 per capita will get state funds to make up the difference. Counties spending more per capita will need to cut back to the uniform amount.
To pay for the new system, the state is keeping the money it has been giving counties to cover the counties’ portion of Medicaid bills and services not covered by Medicaid.
Jess Benson, a financial analyst for the state’s Legislative Services Agency, said that under the new system, “most counties come out ahead. Story County is one of the few that doesn’t.”
Benson said that the switch in who pays for Medicaid was basically “a wash.”
“The state was giving counties money so they could pay 38 percent of the Medicaid bills and the federal government was paying the rest,” he explained. “Now, the state will pay the 38 percent directly, the federal government will pay rest and the counties won’t be in the middle.”
Story County moves about $2 million a year in state Medicaid dollars through its bank accounts to pay for the same amount in Medicaid services.
Shortages like the one anticipated for Story County are being created when counties offer services not covered by Medicaid or property taxes collected by the counties. Counties have gotten money from other state programs to pay for those services.
“Most counties offer Medicaid-approved services and little else,” said Benson. “Story County offers a lot of services that aren’t covered by Medicaid but were covered by other state funds that the state will now keep and use to supplement counties spending under the $47.28 per capita amount.”
Because Story County spends $34.25 per capital on mental health services right now - $13.03 less that the new uniform amount of $47.28 - the state will give the county about $1.2 million per year to supplement the $6 million in property taxes spent yearly on mental health.
However, Story County has been receiving $2 million per year from those other state funds. The difference leaves the county annually at least $800,000 short with the start of Fiscal Year 2014.
The amount of money available from the state for Fiscal Year 2013 which starts this July 1, is even more uncertain.
Legislators designated FY 2013 as a year of transition for the program, with the state taking away the Medicaid and other funds but no supplements for counties under the $47.28 amount. Instead, the legislators included $20 million in the state budget total to compensate counties providing non-Medicaid services with the other state funding.
However, while the $20 million was included in the state budget, the legislature did vote on its allocation. Per Benson’s calculations, the $20 million is more than enough to cover the transition shortfall for counties statewide.
But, he said, allocation would not be done until the new legislative session in January and was not guaranteed.
“Story County will begin FY 2013 with a $2 million shortage,” said Benson. “They will need to decide if they want to providing services under the risk that the legislators may not allocate the money in January.”
The alternative, said Sanders, would be to make a 25 percent cut in services July 1 – an alternative he would like to avoid.
“We don’t know what we will do yet,” said Sanders. “That is why we want to talk on the 22nd. We want to maintain services. I do think it is safe to say that we will need to start a waiting list for new clients.”
The supervisors have invited the Story County legislative contingent to the May 22 meeting. It begins at 10 a.m. in the public meeting room, second floor, Story County Administration Building, 900 6th St. in Nevada.