Iowa’s mental health system is about to change, again. Here's what to expect

For the second time in 12 years, Iowa's mental health system is undergoing an overhaul.

Starting Tuesday, mental health and substance use disorder services are being combined into seven behavioral health districts.

The transition involves moving from regional to district-based eligibility and billing processes. The change aims to provide more consistent care across the state.

Current funding for mental health and substance use disorder treatment will be combined into one behavioral health fund controlled by the Iowa Department of Health and Human Services.

Under the newly designed system, the department will define required services, implement performance metrics and provide oversight of the system, while the districts handle prevention, education, early intervention, treatment, recovery and crisis services related to mental health and substance use disorders.

Advocates of the change hope it will improve access to services and better coordination of care, by combining Iowa's 32 disparate mental health and substance use regions into seven unified behavioral health districts, while placing disability services under the jurisdiction of the Iowa Department of Health and Human Services.

Des Moines-based Iowa Primary Care Association, which was selected by the state to serve as the administrative services organization, will oversee the management and operations of all behavioral health services in each of the new system's seven districts.

The nonprofit has been working to establish a statewide network of providers. As of Monday, Iowa PCA had issued contracts to more than 100 providers across the state. Contracts that have gone out include programs and services like jail- and school-based behavioral health services and co-responder models that pair law enforcement officers with mental health professionals to respond to calls involving individuals experiencing behavioral health crises.

Most agencies had solidified their contracts, however, some organizations still were finalizing details as of early last week, including the Linn County Mental Health Access Center. The center provides crisis care for adults experiencing a mental health or substance use disorder crisis that requires immediate attention. The Mental Health Access Center is open for walk-ins 24 hours a day, seven days a week. No appointment is necessary.

Director Erin Foster said Iowa PCA and county officials had resolved outstanding issues as of Thursday related to funding and outcome measurements to continue providing 24/7 crisis services. The goal is to ensure that clients do not notice any changes in services during the transition.

"We landed on a budget we can use for next fiscal year," which starts Tuesday, Foster said.

She said the Linn County Board of Supervisors will be asked to approve a contract with Iowa PCA at its Monday meeting.

Foster said the funding specified in the contract provides a "bare-bones staffing model."

"It will mean there will be no gaps in our services and we will be able to function as is, but it doesn't provide any growth," she said. "We had hoped we could add staff (during peak times), but that won't happen — at least in the first six months or so."

She said Linn County may be able to revisit the budget at the start of next calendar year.

After July 1, Iowa PCA will focus on contracting for training and technical assistance, community education, prevention, early intervention services, and opioid settlement funding, according to a June 25 presentation by Iowa DHHS.

Foster said the process has been challenging and unsettling due to the complexity and number of contracts and providers involved.

The realignment aims to improve efficiencies and access, but challenges include ensuring consistent services, addressing funding gaps and integrating new counties into existing services. Foster said providers are working diligently to maintain service continuity despite the complexities.

"Iowa HHS and Iowa PCA have worked very hard to prioritize funding for critical and core services and ensure that crisis services are available in all parts of the state beginning July 1," Alex Murphy, director of communications for Iowa HHS, said in a statement. "Over the past few weeks, Iowa HHS and Iowa PCA have met directly with providers to discuss the changes and address their questions and concerns."

As of Friday, Murphy said 60 contracts are fully finalized, with hopes to have a majority of the remaining contracts fully executed by July 1.

Providers that receive a contract through Iowa PCA will receive sustainability crisis funding where they used to receive block grant funding from the regions. In addition, providers will continue to bill Medicaid for services provided to individuals covered by Medicaid, Murphy said. For individuals with little to no insurance, providers are able to bill for approved safety net services. That includes prevention and early intervention of mental health and addictive disorders; crisis and recovery services; and outpatient, inpatient and residential treatment.

Coordination of disability services will be handled by Iowa's new Disability Access Points (DAPs), which are part of the state's Aging and Disability Resource Center (ADRC) Network. DAPs assist individuals by providing information, making referrals, creating service plans, and ensuring ongoing support so Iowans can live healthy, independent lives.

"Iowa HHS has worked closely with DAPs to ensure a smooth transition and continuity of care for individuals previously served by the Mental Health and Disability Services Regions," Murphy said.

Navigators will help Iowans access system

For those needing mental health and substance use services, not much will change, especially for those already accessing services, according to Foster and Iowa HHS.

"Nothing will change for Iowans who have Medicaid or private insurance, services and providers will stay the same," Iowa HHS states on its website. "Iowans who do not have insurance or very limited insurance will be able to get help through the Behavioral Health Service System."

For people newly seeking services, the new system includes navigators to help guide people to the right care and services, regardless of location.

System navigators will provide short-term support and guidance to all Iowans, regardless of insurance or income, according to Iowa HHS. They will help connect people to services by providing information, referrals and support to navigate the new system, particularly for those facing barriers to accessing care. Specifically, they may help with scheduling appointments, connecting to support groups, and addressing barriers to accessing services, according an Iowa HHS presentation.

The goal is to make accessing behavioral health services easier and more streamlined for everyone, Abbey Ferenzi, a licensed mental health counselor and senior director of behavioral health services at the Iowa Primary Care Association said during a June 5 virtual town hall.

The service does not provide clinical assessment, treatment, medication prescriptions, or counseling services. Navigators do not respond to emergencies or provide crisis intervention, and will provide support during regular business hours and work proactively with individuals to address needs before they escalate.

Iowans can access the service by calling Your Life Iowa at 855-581-8111, texting 855-895-8398, or via chat at YourLifeIowa.org. Your Life Iowa is accessible 24/7 and will connect individuals with system navigators as soon as possible.

Community partners can coordinate directly with Iowa PCA system navigators starting July 1 by calling 515-505-8988.

Iowa previously had a county-by-county system for 99 counties

Previously, Iowa had various Mental Health and Disability Services regions with each responsible for providing services within the counties they served.

It replaced a 99 county-by-county system, where prior to the 2013 changes, residents in metro areas like Linn, Scott and Johnson counties had better access to services than those in less populated areas. Larger counties had more money and therefore, more providers.

The state wanted to regionalize the system to spread services out more equally with the hope that Iowans could get service no matter where they lived in the state.

The regions funded certain services, paid the care bills for people who lack insurance or are underinsured, and paid for the expenses of court-ordered mental health treatment and commitments such as sheriff's office transportation, hospitalization and attorney fees.

The state will now directly fund services, replacing regional payments.

Marissa Eyanson, director for behavioral health and disability services at Iowa DHHS, said during a June 5 virtual town hall that the goal is to create a funding system that prioritizes patient access and service quality over administrative boundaries, ensuring that Iowans can receive necessary mental health and substance use services regardless of their location.

"This really is thinking about how we invest our money differently," Eyanson said. "So, ultimately, we've been in a long process now around how we plan for a care continuum and ultimately a safety net related to behavioral health services for all Iowans. And one of the key components of that really comes to how we use the funds that we have available when we think about the behavioral health service system in a way that invests those dollars to have the most impact."

Theresa Graham-Mineart, director of outpatient services at the Abbe Center for Community Mental Health in Cedar Rapids, said the move from regions to districts in Iowa won't significantly affect patients, but will change processes for providers and agencies on the eligibility and billing sides.

Graham-Mineart said the new formula for financial eligibility is more generous than the previous regional system, breaking down barriers to access mental health services and ensuring uniform eligibility across the state.

She said the new system will help equalize services and financial assistance across Iowa, reducing disparities in care based on location. The new model also will provide more coordinated care for individuals with co-occurring mental health and substance use disorders.

"I think what we're seeing is opportunities to provide more consistent care," Graham-Mineart said. "… Any time there's change, I think that there's anxiety. But I think, overall, this recent change shows a desire to have more consistency across the state so that all Iowans get access to quality health care."

She said Iowa PCA is committed to ensuring smooth operations and timely payments post-July 1.

"There may be change down the road, but the immediate concern is making sure that on July 1, people can get assistance and agencies can bill and get paid," Graham-Mineart said.

Eastern Iowa district, with 1 million residents, could strain resources

Other providers in Eastern Iowa, though, have raised concerns about funding gaps, ensuring consistent services, and integrating new counties into existing services and local input with the new district setup.

Foster said the state's rate sheets for providers are also 15% lower than Medicaid rates, raising financial concerns.

"That brings a lot of uneasiness to some providers who rely on really being that safety net of helping individuals who either have no insurance, are under insured, or someone like me who has private insurance, but my insurance doesn't cover it," she said.

Rich Whitaker, CEO of Vera French, a Davenport-based nonprofit that provides mental health and housing services, told the Quad-City Times: "According to the state, they have only so much money, and they basically did their calculations and came up with, in order to provide all the services that the regions had been providing, they could only pay 85 percent of Medicaid for most services."

The transition also dovetails with proposed changes to Medicaid moving through Congress.

The Congressional Budget Office estimates that 7.8 million more people will be uninsured because of work or school requirements for able-bodied Americans and spending reductions included in President Donald Trump's "one big beautiful bill."

Pushing more clients who have no insurance or other ability to pay to safety net providers like access centers, public hospitals, community health centers and behavioral health clinics will only threaten their bottom line, Foster said, and create ongoing challenges for the state to support behavioral health care needs within its budget each year.

Foster said she's also concerned about potential funding disparities between districts.

Linn and Johnson counties were previously part of a nine-county region with a population of about 600,000. Under the realignment, they're now included in a 14-county district that also includes Scott, Dubuque and Black Hawk counties.

The new district is the largest by population, and contains five of the eight largest cities in Iowa. Nearly one-third of Iowans — about 1 million people — live in the new district.

Foster said she worries about potential financial strain on providers — ensuring that the funding model can support the comprehensive behavioral health needs of a larger, diverse population without compromising service quality — and the risk of reduced services or scaled-back programs.

Under the realignment, funds will not be distributed based on population, but based on services. Foster said there's unease and uncertainty as to whether funding will proportionally match population needs.

She said she would like to see a funding model that avoids a one-size-fits-all funding approach, recognizing that District 7 has different resource requirements compared to less populated districts; one that provides adequate reimbursement rates that support sustainable service delivery and accounts for specialized services like crisis care that have unique cost structures.

Iowa DHHS and the Iowa PCA have said they have undertaken a comprehensive review and analysis of the approved services and available funding based on FY24 and FY25 data. According to a June 23 email from Iowa PCA, officials have "attempted to extract all direct services core to the continuum and eligible for access and sustainability funding and included them in one contract, by provider or partner organization, to carry forward July 1, 2025, in services areas as of June 30, 2025."

The email states Iowa PCA will work with Iowa HHS and providers during the next year to complete a more robust assessment and planning process to inform future funding decisions with the goal of enhancing services available across the continuum.