The pace at the capitol has slowed considerably as the legislature now moves into overtime. There was limited floor debate this week while budget chairs and leadership worked to find consensus on the remaining policy priorities and the state budget for the upcoming fiscal year.
Telehealth Payment Parity
This week, the Senate took action to advance their end-of-session omnibus bill – SF 619. This legislation, which represents agreed upon measures between the Senate and the Governor’s Office includes a host of tax reform provisions, as well as a key priority of both the governor and the House – commercial telehealth payment parity for behavioral health services. This section, which would require state-regulated health insurance plans to reimburse for behavioral health services via telehealth at 100% parity with in-person services, has been opposed by several key members of the Senate. Inclusion in SF 619 represents a key concession from the Senate as they seek to secure support from the House and the governor on other Senate priorities included in the bill.
A Senate subcommittee moved SF 619 forward on Monday and on Tuesday the bill passed out of both the Appropriations and the Ways and Means Committees on a party-line vote. The House end-of-session omnibus bill – HF 893 – contains the same telehealth parity language as the Senate bill, as does the House’s version of the HHS budget bill. While there is still a chance the insurance industry, which is strongly opposed to this measure, is successful in getting this parity language stripped from the final deal between the two chambers and the Governor’s Office, this looks unlikely. The House and Senate continue to differ on a handful of other provisions that are included in SF 619 but not HF 893.
Mental Health Funding
Among the largest differences between the Senate and Governor’s end-of-session omnibus proposal – SF 619 – and the House’s end-of-session omnibus proposal – HF 893 – are the provisions of the Senate bill that change the manner in which mental health services in the state of Iowa are funded. SF 619 would eliminate the current property tax funding mechanism that provides approximately $100 million in funding annually to the mental health regions. In its place, the bill would establish a new regional services fund with with state General Fund dollars, which the Department of Human Services would distribute on a per capita basis to the regions. The bill provides for annual increases in this funding stream until FY2025 when a regional growth factor would begin to be utilized in determining the per capita rates paid to the regions.
Proponents of the change have noted that Iowa is the only state in the nation that utilizes property taxes to fund its mental health system, and the General Fund and reserve funds are currently well-positioned to support this change in funding streams. During the subcommittee meeting on Monday and committee discussion of the proposal on Tuesday, opponents cautioned that this change would leave funding for mental health services entirely subject to the whims of the legislature. They noted that SF 619 would also eliminate the property tax backfill – a mechanism established in 2013 to utilize General Fund dollars to offset the reductions in tax revenue for local municipalities as a result of property tax cuts passed by the legislature that year. Opponents argue that the legislature committed to continuing this General Fund support to keep local municipalities whole and just eight years later are not walking away from that commitment, which they believe is likely to occur with mental health funding as well.
House leadership has signaled their reservations to the proposed funding change, which is now part of the larger end-of-session budgeting and policy negotiations.
IMS continues to have discussions with legislators about the importance of passing a hard cap on noneconomic damages before adjourning this session. Our companion bills HF 592 and SF 557 to enact a $1 million cap remain eligible for consideration at any time and the legislative language could be included as an amendment to another bill if we are successful in securing the final votes needed to pass the bill through the House. With likely adjournment rapidly approaching, the window of time for action on this critical reform is beginning to close. Your sustained legislative outreach throughout session has helped to keep this issue front and center with lawmakers.
If you haven’t contacted your legislators on this issue recently, please touch base with them again to ask for an update on where things stand with tort reform and remind them how important it is to their local physicians that this reform get passed this session. The IMS Action Alert on this issue remain active and can quickly connect you with your legislators if you have not yet taken action and do not know who are your local legislators.