Hillcrest announces it’s ceasing operations at Highland Place


The board of trustees of Hillcrest Family Services voted Aug. 28 to cease operation of Highland Place, its adult mental health residential care facility near Ottumwa, Iowa, effective Oct. 31.

The decision came after a year and a half of study, deliberation and negotiations with the owners of Highland Place, and public funding and regulatory sources for mental health and developmental disability sources.

The building and grounds of Highland Place are owned by The Heartland Group, a public authority of Jefferson and Wapello counties. Hillcrest pays a substantial rent to The Heartland Group for use of the facilities and has been responsible for operating Highland Place since 2001.

The South Central Behavioral Health Region, which coordinates access to all mental health and developmental disability services in Appanoose, Davis and Wapello counties, had earlier notified Hillcrest that it will be discontinuing funding regional residents at the facility, said Gary Gansemer, chief executive officer of Hillcrest.

A decision by the U.S. Supreme Court, known as the Olmstead Decision, is changing the way states use federal Medicaid money. “The Olmstead Decision emphasizes individual decision in determining living arrangements and least restrictive environment for people with mental illness or developmental disabilities. Usually this is interpreted to mean making it possible for more individuals to live in a ‘normal’ small home setting in a community of their choice,” Gansemer said.

Hillcrest has been meeting with representatives of Medicaid staff at the Iowa Department of Human Services about these funding changes, Gansemer said. “It is clear to Hillcrest that larger Iowa facilities such as Highland Place, which appear isolated from community integration, may soon lose Medicaid funding for residential services and the clients also would lose Medicaid funding for medical services. There is also the risk of large retroactive payments for Hillcrest,” he added.

At same time, Hillcrest has been unable to negotiate a fair rental agreement with The Heartland Group in spite of reduced funding and lower occupancy, Gansemer said. Public documents indicate Hillcrest pays The Heartland Group $102,000 annually to rent the facility. The trustees of Hillcrest issued a letter Aug. 29 to the board of The Heartland Group, providing 60-day notice of discontinuing its contract.

While finances led to the decision to close Highland, Gansemer said “Our primary concern is the well-being of our 35 residents in Highland Place,” Gansemer said. “We’re working with the residents’ case managers and other agencies to find the most appropriate placement for our current residents.”

Hillcrest also employs 34 at Highland Place and that’s another major concern for the Hillcrest trustees. “We have dedicated employees at all of our facilities,” Gansemer said, “and Highland is no exception.”

In a letter issued to Highland employees yesterday, Gansemer wrote, “I sincerely thank you for your dedicated services whether you were with us from the beginning … or whether you joined our team a short time ago. This decision does not reflect in any way on what you have contributed to the people who make Highland Place their home. It reflects the changing nature of services to persons with chronic and persistent mental illness.”

Because Hillcrest recognizes the magnitude of these circumstances, Gansemer said, the agency is granting special severance-pay packages, hiring priority at other Hillcrest facilities and job-search assistance.

Deb Lang, vice president for adult residential services at Hillcrest, has been the administrator of Highland Place. She will now focus on the operation and expansion of adult residential services in other parts of Iowa and the region, Gansemer said.

Hillcrest’s trustees came to the conclusion that without financial support for regional residents, the questionable status of state and federal dollars and the inflexibility of rental terms, its Highland facility would be operating at a loss. “We can’t allow one facility to jeopardize the financial stability of the agency,” Gansemer said.

Hillcrest Family Services, headquartered in Dubuque, offers more than 30 treatment programs and serves more than 25,000 people. It has been in operation for 118 years.

“Over the years we’ve ethically and enthusiastically met various funding changes in the adult residential services system in partnership with counties and the state,” Gansemer said. “We plan to continue being a premier provider of these services.”