nysarc: new york state budget analysis fy 13-14

7/29/2019 NYSARC: New York State Budget Analysis FY 13-14

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ANALYSIS OF FY 13-14 PROPOSED STATE BUDGET FOR SERVICES

FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES

A transitional budget for services to people with developmental disabilities. The ExecutiveBudget proposal for FY 13-14 marks a challenging turning point for services for people with

developmental disabilities. In particular, it includes extensive amendments to the Public Healthlaw to create a foundation for eventually bringing almost all services for people withdevelopmental disabilities into managed care.

These new amendments appear to give the Commissioner of Health greater authority overservices for people with developmental disabilities in key areas such as rate setting andoversight. While OPWDD continues to retain important responsibility in these and other areas,managed care is and has been for years under the jurisdiction of the State Department of Health.NYSARC has been told that thats where the expertise is. So, it is only natural that DOH willhave increased influence over our field.

Nonetheless, this shift toward DOH raises important concerns. Many of these concerns havebeen triggered by the experience of many providers and advocates who have warned that DOH isan agency with limited sensitivity to the needs of people with developmental disabilities. This isreinforced by DOHs overwhelming responsibility for populations served through a medicalmodel which presumes that care is aimed at curing people. This model is not appropriate to thelifelong needs of people with developmental disabilities for whom the habilitative model,aimed at giving them full lives in their communities, has evolved over the last three decades.

This poses a very significant challenge to people with developmental disabilities, their familiesadvocates and their providers.

OPWDD APPROPRIATIONS (AND RELATED HIGHLIGHTS)

Category FY 12-13 Requested FY 13-14 Change Percent change

Aid To Localities 2,479,141,000 2,480,091,000 950,000 .03

Capital Projects 163,540,000 168,950,000 5,410,000 3.0

State Operations 2,144,907,000 2,083,756,000 (61,151,000) (2.8)

Total 4,787,588,000 4,732,797,000 (54,791,000) (1.1)

OPWDD

A. Downsizing State Operated programs


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There appears to have been a major policy decision to downsize State operated programsincluding:

DC Rundown Developmental Center census is expected to drop from about 1,000individuals to about 700 over the course of FY 13-14. Most of these individuals are

expected to be absorbed by voluntary programs.

State operated community rundown The significant personnel drop in state operatedcommunity programs reflects an anticipated reduction in the number of individualsserved in those programs. However, it is not clear how many people that reductionincludes. Again, most persons from State operated community programs are expected tobe absorbed by voluntary operated community programs.

Reduction of the OPWDD workforce As a result of the decision to reduce State operatedprograms, OPWDD personnel are reduced by 1,249 FTEs from 19,816 to 18,567,including 450 in State operated community services and 799 in institutional services.This is expected to generate significant but currently undetermined savings.

The Executive Budget states: To ensure OPWDD delivers the most integrated and costeffective services possible, the Budget supports ongoing plans to downsize institutionalprograms by including resources to fund more integrated and appropriate serviceopportunities in the community. Specifically, the Budget reflects the closures announced lastyear of the Finger Lakes and Taconic Campuses which are expected to be completed byDecember 2013. The vast majority of new services will be provided by the agencys networkof nonprofit providers.

B. Voluntary funding to absorb people from State institutional and community programs

While voluntary programs are expected to absorb most people from State institutional andcommunity programs, funding for voluntary programs is flat from year to year. However,the appropriation bills authorize the transfer of savings from State operations budget to theAid to Localities budget which funds voluntary programs.

C. No trend factor/cost of living increase is contained in the Governors proposed budget

Trend factor With the controversial institutional rate methodology effectively dead, theMedicaid trend factor which the developmental disabilities system had for years received, isno longer possible. (See G. Payback of federal funding for Institutional Rate Controversy.)

No Cost of living increase (COLA) The budget would delay the Planned Human ServicesCOLA Increase of 1.4%. This is the fifth year in a row the budget has done this. A notrend/no COLA policy is across all human services and mental hygiene providers.


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D. OPWDD Development

The budget contains about $30 million in development for new services. Along with federalfunds this amounts to about $60 million. The exact breakout of this funding has not yet beendetermined but it is expected to include supported work, residential supports and various day

options.

However, the budget also projects a reduction of $32.1 million in development for FY 13-14expanding to $64.2 million in FY 14-15.

E. Enhanced Family Care Rates

About $5 million is recommended to enhance rates for Family Care to make it a more viableoption.

F. Various OPWDD reforms According to the Executive Budget these include the following

Increased hiring qualifications and training standards in State-run programs for directsupport professionals, including pre-employment psychological and fitness training,mandatory drug testing, rigorous background checks, and a minimum of a high schooldiploma.

Refocused efforts on cases of abuse, with creation of a centralized Incident ManagementUnit with real time oversight of incidents, and an overhauled investigations process thathas direct relationships with local law enforcement/State Police.

Holding non-profit providers more accountable for their performance via a restructured

Early Alert program to quickly remedy deficiencies in non-profit provider services, withimposition of fines and revocation of operating certificates when appropriate.

An improved statewide standardized objective process to ensure potential new non-profitproviders have the requisite fiscal and programmatic expertise, and an initiative thatsupports and recognizes providers that have achieved excellence in service delivery.

Enhanced fire safety efforts, implementing recommendations of outside experts tocomply with enhanced standards, including unannounced fire drills, better training andsafety plans, direct relations with local fire personnel, and capital improvements.

G. Payback of federal funding for institutional rate controversy

$1.1 billion in federal funds at risk. The issue of the $5,000 per day New York Statedevelopmental center rate, originally reported on over 2 years ago in the PoughkeepsieJournal, erupted in a major controversy which included hearings by the House OversightCommittee last summer. In response to the controversy generally and the hearingsspecifically, CMS has demanded that New York State return substantial federal Medicaidfunding totaling approximately $1.1 billion.


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While this matter has not formally been concluded, NYSARC has been told that the entire$1.1 billion in revenue to New York State is at risk. If a satisfactory settlement with CMS isnot reached, there is a strong likelihood that it will result in cuts to developmental disabilitiesand other Medicaid providers.

If the State loses the entire amount of federal funds at risk, the States budget deficit for thisentire years $140 billion State budget would be doubled.

The State budget notes: On January 11, 2013, based on a request from Federal CMS, theState DOH submitted an amendment to the State Plan for OPWDD to lower Medicaiddevelopmental center payment rates effective April 1, 2013. This has the impact of loweringFederal funding to New York by approximately $800 million annually beginning in FY 2014.In addition, Federal CMS has requested that the State lower other rates for State-providedservices by April 1, 2013, which would result in an additional reduction in Federal fundingof roughly $300 million in FY 2014. The State is in ongoing discussions with Federal CMS

concerning alternate funding approaches to avoid these reductions, but no decisions havebeen finalized. As a result, the State is preparing a contingency budget reduction plan thatwould need to be undertaken in order to keep the FY 2014 budget in balance. The plan beingdeveloped will cover the potential loss of $1.1 billion in Federal funding.

TRANSITION TO MANAGED CARE, DOH

A. Consolidation of Medicaid functions into the Department of Health

The Executive Budget states that it will Combine all Medicaid administrative functions intothe Department of Health. According to the budget Currently, multiple agencies play a rolein administering the Medicaid program, despite the Federal requirement that there be oneState Medicaid Agency. In 2013-14, all State Medicaid administrative functions (e.g., ratesetting, negotiation of managed care contracts, claims processing) will be consolidated inDOH. This will standardize administrative practices; generate efficiencies, and free agenciesto focus on Medicaid policy and the implications of Medicaid on their constituencies.

B. Managed care for people with developmental disabilities

According to the Executive Budget OPWDD is seeking authorization from the Federalgovernment to make changes that will improve coordination of long-term care, acute andbehavioral health care services for individuals with developmental disabilities, increase theflexibility of services provided to individuals with developmental disabilities, increasefunding transparency, and improve overall service quality and outcomes. Without thesechanges there could be significant negative consequences on the States ability to maintaincurrent service levels.

Extensive Article 7 budget language is included to 1) define/describe DISCOS, 2)allow for expansion of existing HMOs to serve people with developmental disabilities


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and 3) authorize Managed Long Term Care (MLTC) programs to serve people withdevelopmental disabilities.

The language requires approvals on key issues (rate setting, oversight, assessments,character and competence of potential managed care providers) by the Commissioner

of DOH solely or jointly with the Commissioner of OPWDD or in consultation withthe Commissioner of OPWDD. In the key area of rate setting the Commissioner ofDOH either exclusively or jointly sets rates with the Commissioner of OPWDD, withthe approval of the Director of the Budget. For the existing system, section 43.02 ofthe Mental Hygiene law gives that sole authority to the Commissioner of OPWDD,with the approval of the Director of the Budget.

This language, along with consolidation of functions in DOH, marks transference ofsignificant authority for services for people with developmental disabilities fromOPWDD to the State Department of Health (DOH). It appears that OPWDD willcontinue to play an important role in the new managed care system.

C. Other items to facilitate system change/managed care

Other items to facilitate the future reconfiguration of the OPWDD system under managedcare include:

Regional crisis capacity. To be accomplished through a phase in of 50 state positionseach year for the next three years (total 150).

Managed Care assessments and Quality Review. To be accomplished through thephase in of 50 state positions a year for 3 years (150 positions total).

JUSTICE CENTER

Justice Center implementation

The Governor recommends total funding of $45,013,000 to fund the Justice Center for theProtection of People with Special Needs, the new state agency created last year to deal withabuse of vulnerable populations. The Justice Center is expected to have 280 full time equivalentpositions.

The Justice Center will subsume the functions of the Commission on Quality of Care andAdvocacy, saving $9.4 million in annual funding. The Justice Center will be operational by June30, 2013.


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SCOPE OF PRACTICE

Making Certain License Exemptions Permanent

The Executive Budget States that it includes legislation to make permanent the current long

time temporary exemption for certain social work and mental health professional licensurerequirements of persons employed by a program or service operated, regulated, funded, licensed,or approved by OMH, OPWDD, OASAS, DOH, OCFS, Office for the Aging, Department ofCorrections and Community Supervision, and/or local governmental units or social servicesdistricts.

The licensure exemption was due to sunset on July 1, 2013. The Governors Article 7 budgetlanguage deletes the sunset, making the exemption permanent.

NYSARC and other developmental disabilities providers had advocated for this exemption priorto release of the Budget.

SCHOOL RELATED PROGRAMS

A. Early Intervention

Some key Early Intervention reforms, among quite a few others, include:

Require expanded insurance coverage of Early Intervention services. This includesHMOs, CHIP (Childrens Health Insurance Program), Medicaid and other healthinsurers. Early Intervention services would be defined as a covered service forpurposes of CHIP.

Require the use of network providers to provide services and perform screenings andevaluations.

Authorize health insurers and HMOs to reimburse providers at negotiated rates. Suchpayments would be considered payment in full. Additionally, they would be authorizedto charge copays and deductibles. It should be noted that these out-of-pocket costs arereimbursable with public funds.

Require providers to exhaust all appeals to insurers. This would be a precondition ofclaiming State/county reimbursement through the DOH Early Intervention agent.

Require the direct submission of HMO claims through the States fiscal agent.

Impose various limits and conditions on evaluation. Including prohibit reevaluationwithin 3 months of a previous evaluation; requiring that evaluators only use evaluationinstruments approved by DOH; and, conduct mandated screenings prior to an evaluationto efficiently focus evaluations. Also, multidisciplinary evaluations could be performedby a single professional with appropriate licensure in more than one discipline.


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B. Preschool Special Education

In the wake of numerous stories on financial abuse in the States preschool program, theGovernors Budget notes that projected State expenditures of $1.1 billion for the next schoolyear will represent a doubling of total preschool cost over the last 10 years. To address theunsustainable growth the Executive Budget recommends:

A large scale audit of preschool providers. This will result in an extensive data base thatcan be used to enhance accountability and oversight.

Enhanced county oversight capacity. The Executive Budget includes $1 million in grantfunding to counties to enhance their ability to detect fraud and abuse. To incentivize

county oversight, the budget authorizes counties to retain 75% of audit recoveries(instead of the current 40.5%).

Allow New York City to set rates. Given the disproportionate increase in preschool costsin New York City, the budget authorizes the City to set its own rates subject to certainconditions and constraints.

C. School District Mandate Relief

As recommended by the Mandate Relief Council, the Executive Budget will create a newwaiver process which will allow school districts and private 852 programs to petition theState Education Department for flexibility from special education requirements.

MINIMUM WAGE INCREASE

The Executive Budget proposes to increase the hourly minimum wage from $7.25 to 8.75.

nysarc: new york state budget analysis fy 13-14

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