East Central MHDS region to cease June 30 as state shifts to statewide behavioral health model

The East Central Mental Health and Disability Services (MHDS) region will cease operating June 30 under Iowa law, a regional official told the Benton County Board of Supervisors on Tuesday, after the state selected a single statewide administrative services organization (ASO) to manage behavioral‑health services.

The regional director said the state selected a private nonprofit ASO that will handle behavioral health and substance‑use services statewide, and that Iowa Administrative Code 441.225C sunsets June 30, which ends the region’s authority. The region submitted a transition and closeout plan to the Iowa Department of Health and Human Services (HHS) that estimates about $3.5–4.0 million in accruals and closeout costs for July–September and related expenses through December 31, 2025.

Why it matters: the accounting and administrative responsibilities will shift from the region to the ASO, while counties will retain some direct obligations (for example, initial payments for certain court‑ordered commitments or mental‑health advocates and sheriff transportation) and will need budget authority to “pay and chase” reimbursement from the ASO.

Regional staff said they will support a multi‑month closeout period (July 1–Dec. 31) to process FY25 bills and reconciliations. The plan includes keeping a small number of finance staff through the closeout period, funding for professional liability and fiscal‑agency charges, and a modest retention incentive for staff who remain to finish mandatory work. Staff well‑being support (up to five mental‑wellness sessions per staff member with a licensed counselor) and job‑search assistance were presented as part of the personnel transition plan.

Regional staff also described the separate competitive processes the state used: one RFP for the ASO (behavioral health) and a different selection for the disability access point. Benton County will belong to District 6 under the new map; Central Iowa Community Services (CICS) was awarded several disability districts including District 6, meaning counties now assigned to CICS will become part of a larger 44‑county configuration for disability access services.

Officials emphasized that the change does not eliminate state appropriations for services: the dollars described as moving from $28 million to about $3–4 million instead reflect a change in who administers payments and what the region will fund after July 1, not a disappearance of service funding. The region expects to retain responsibility for a small set of short‑term direct payments (a modest list of services capped around 90 days) and for service coordination as a disability access point, but most behavioral‑health provider claims and ongoing payments will go through the ASO.

County implications described by staff included: possible changes to how sheriffs, court‑appointed attorneys and mental‑health advocates submit and receive payment; potential new reporting and documentation requirements from the ASO; a likely reduction in in‑county physical presence of access staff because available disability access funding is smaller and allocated differently; and ongoing work to inventory and transfer property (vehicles, computers and furniture) that the region purchased on behalf of counties.

Regional staff said they had submitted their closeout budget and were awaiting final approval from HHS. The board and staff discussed the timing of contracts, the need for counties to budget at least for an initial quarter of certain costs, and the possibility that existing local crisis hubs and other programs may not be funded at the same level by the ASO. The regional director said the region would seek to be a transition partner and to communicate regularly with counties as the ASO and HHS finalize operational details.