Protecting Vulnerable Pennsylvanians

byPreserving Services for People with Mental Illness, Substance

Use Disorder, Intellectual Disabilities and Autism

Funding for Community-based Behavioral Health and Intellectual Disability Services Has

Already Been Cut, and Cut, and Cut.  

Payment rates for these services have not kept pace with (a) inflation (CPI), (b) the Home Health Market Basket Index, or (c) the State General Fund over the past two decades. See Chart 1 attached.

Over the past twenty years, payment rates for these services have been cut 40% compared to the cost of providing these services.

Over the past eight years, the Governor proposed cost-of-living adjustments to these payment rates in only three of the last eight years.  In both FY 2005 and FY 2009, the Legislature added funding for payment rate increases at less than inflation.  See Chart 2 attached. 

 

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90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11

State General Fund

0 0.1289037089945

11

0.1419727493111

81

0.2109646812111

87

0.2619210895123

07

0.3058185543757

87

0.3256537337907

0.3902850788776

42

0.4570117823757

72

0.5520984820868

48

0.6084733405553

58

0.6720965756786

12

0.6676077410479

32

0.7278316441869

37

0.8541490624464

64

0.9725412808229

49

1.1194958097662

2

1.1902498006644

1

1.2802695442267

4

1.2437909700655

3

1.3370815562731

8

HHMBI

0 0.0475460122699

388

0.0782208588957

054

0.1211656441717

79

0.1533742331288

34

0.1840490797546

01

0.2147239263803

68

0.2484662576687

11

0.2868098159509

2

0.3251533742331

29

0.3742331288343

55

0.4309815950920

25

0.4800613496932

51

0.5260736196319

02

0.5766871165644

18

0.6242331288343

55

0.6748466257668

72

0.7331288343558

29

0.7914110429447

85

0.8251533742331

29

0.8711656441717

79

CPI-U (Seasonally Adj)

0 0.0301470588235

294

0.0610294117647

061

0.0875000000000

002

0.1205882352941

18

0.1522058823529

41

0.1779411764705

88

0.1970588235294

12

0.2205882352941

18

0.2661764705882

35

0.3066176470588

23

0.3205882352941

18

0.3463235294117

65

0.3889705882352

95

0.4242647058823

54

0.4845588235294

13

0.5235441176470

59

0.5976397058823

53

0.5776323529411

78

0.5950661764705

89

0.6361384674922

6

BH/ID/A Reimbursement

0 0.0300000000000

001

0.0506

0.0716120000000

001

0.0930442400000

002

0.0930442400000

002

0.0930442400000

002

0.11490512

48

0.137203227296

0.1599472918419

21

0.1831462376787

58

0.2068091624323

34

0.2068091624323

34

0.2068091624323

34

0.2309453456809

81

0.2555642525946

0.2806755376464

92

0.3190958037758

87

0.3322867618136

47

0.3322867618136

47

0.3322867618136

47

10.00%

30.00%

50.00%

70.00%

90.00%

110.00%

130.00%

150.00%

Over the Past 20 Years, BH/ID/A Reimbursement Lags Far Behind Increases in the State General

Fund and in Inflation

Cu

mu

lati

ve

Pe

rce

ntag

e C

ha

ng

e

HHMBI

CPI-U (Seasonally

Adj)

BH/ID/A Re-imbursement

State Gen-eral Fund

4

BH/ID COLAs by Fiscal YearActual Compared to HHMBI

FiscalYear

93-94 0.00% 0.00% 0.00%

94-95 2.00% 2.83% -0.83%

95-96 0.00% 2.75% -3.66%

96-97 0.00% 2.59% -6.39%

97-98 2.00% 3.15% -7.77%

98-99 2.00% 2.88% -8.91%

99-00 2.00% 3.73% -11.08%

00-01 2.00% 4.25% -13.98%

01-02 2.00% 3.45% -16.06%

02-03 0.00% 3.18% -20.15%

03-04 0.00% 3.31% -24.55%

04-05 2.00% 2.99% -26.40%

05-06 2.00% 3.45% -28.97%

06-07 2.00% 3.40% -31.60%

07-08 3.00% 3.30% -33.01%

08-09 1.00% 3.00% -37.69%

09-10 0.00% 2.00% -39.67%

10-11 0.00% 2.10% -43.12%

MH/MR COLA HHMBI** Difference

**Home Health Market Basket Index.Source: Global Insight.

Payment Rates for Community-based Behavioral Health and Intellectual Disability Services Have Lagged Behind Other Major

Medicaid Service Providers Over the Past Twenty Years. 

Annual payment rate increases for Medicaid MCO’s and Nursing Homes far exceeded payment rate increases for hospitals, which exceeded the payment rate increases for home and community-based behavioral health and intellectual disability services. See Chart 3 attached.

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2.50%

17.50%

32.50%

47.50%

62.50%

77.50%

92.50%

107.50%

122.50%

137.50%

152.50%

BH/ID/A Reimbursement Lags Well Behind the Increases in Medicaid Payments Received by

Other Major Medicaid Providers in Pennsylvania

Cu

mu

lati

ve C

OL

A I

ncre

ase

(Com

pou

nded)

Source: Governor's Executive Budget

MCOs

Nursing Homes

State General Fund

Hospitals

BH/ID/A Reim-bursement

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The Cost of Community-based Behavioral Health and Intellectual Disability Services is Less than Half

the Cost of State Institutions. 

The average cost per resident in state MR Centers is $256,622 compared to the average cost of residential and day program services in the community for people with intellectual disabilities of $112,000, or 44% of the cost of the mandatory Medicaid entitlement alternative. See Chart 4 attached.

The average cost per patient in State Mental Hospitals is $195,891 compared to the average cost of residential and day treatment services in the community for people with mental illness of $60,850, or 31% of the cost of care in state institutions. See Chart 4 attached.

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8

State MR Centers Community ID Programs

State Mental Hospitals

Community BH Programs

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$256,622

$112,000

$195,891

$60,850

FY 11 Average Cost per PersonState Insitutions vs. Community Programs

Avera

ge C

ost

per

Pers

on

The Cost of Direct Support Personnel is Twice as High in State Institutions as in Community

Programs.

Based on a Legislative Budget and Finance Committee report1, the average hourly wage for direct support personnel in community-based programs ($8.84), is less than half the wages paid ($17.78) in state institutions and the difference continues to widen. 

The Average annual wage of a direct support professional in a community setting ($18,390) is only slightly above the federal poverty guidelines for a family of three.2

1 LBFC Report on Salary Levels and Their Impact on Quality of Care for Client Contact Workers in Community Based MH/MR Prorgams http://lbfc.legis.state.pa.us/reports/1999/204.PDF

2 American Network of Community Options and Resources (ANCOR) 2008 Direct Support Professional Wage Study

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Opportunities for Cost-Shifting to Other Payers is Almost Non-Existent.

The state (with matching federal funds) is the single payer for community-based behavioral health and intellectual disability services. 

There is almost no private pay (less than 1%) for these services.

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The Almost Exclusively Non-Profit Providers of these Services are Financially Fragile.

For 45 years, DPW payment policy and county MH/MR agency practice severely limited retained revenue.

County contracts, DPW fiscal regulation, and ODP Instructions to Cost Reporting carefully limit allowable costs.

Cash advances from counties, and now gross adjustments from DPW, continue to be necessary to ensure adequate cash flow for many of these community-based providers.

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Cuts in these Services will Increase Costs Elsewhere in State and County Government.

County jails and state prisons are among the default treatment option for people with autism and untreated behavioral health needs.

Cuts that lead to program closures for people with intellectual disabilities will result in a re-institutionalization policy contrary to the Americans with Disabilities Act at greater expense to the state budget.

The lack of adequate Waiting List funding for people with intellectual disabilities is resulting in Section 406 commitments to state MR institutions by county common pleas courts, at a cost of $256,622 per person per year, which will only accelerate if further cuts are made.

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Traditional Cost Cutting Measures (Serving Fewer People or Providing Fewer Services) are Not Available

in the Community ID Waivers.

Existing waiver participants cannot be terminated from ID waivers, according to federal law, and there is almost no turnover of the people enrolled in these waivers.

The amount and kinds of services provided to ID waiver participants cannot be cut back, according to federal rules. 

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Medicaid Waiver Services for People with Autism

Must Be Preserved

Two Medicaid waivers generate federal matching funds for services for 500 adults with autism spectrum disorders.

The preservation of these services will help to reduce costly and inappropriate “care” for people with autism, including county jails and state prisons.

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