ten issues to consider when implementing individual or level-based budget allocations

Ten Issues to Consider When Implementing Individual or

Level-Based Budget Allocations

North DakotaMay 2011

Jon Fortune of HSRI

Jon Fortune, John Agosta, Kerri Melda, & Drew Smith

Human Services Research Institute7420 SW Bridgeport Road (#210)

Portland, OR 97224503-924-3783

[email protected] [email protected]

Today’s Topics…

The Big Picture• What are we trying to do overall?• Potential Challenges in ND

Key issues policy makers face as they focus on developing more efficient & equitable individually tailored resource allocation models

• Assessment tools like the Supports Intensity Scale (SIS) and why they are being used and what is being discovered

• The strategic planning process we use Your questions?

Human Services Research Institute 2

The Big Picture…


What are we trying to do?

We are tying to establish a way to allocate resources so that people get what they need, no more and no less.This means that people with the least needs are allocated the least amount. Those with greater needs get more.

To develop a system like this, we need good information on the people served and their need for support, an understanding of what different services cost, and a good way to track spending.

This requires policy makers to settle on the types of services that should be offered, what they are willing to pay for these services, and what outcomes are expected.


$

Little

Support Needed

Little A Lot

We want to move from a low correlation like THIS…

…to a high correlation

like THIS

$

Little

Support Needed

Little A Lot

A Lot

A lot

What is your financial architecture for ID service systems?


Where are you& where are you going?



Illinois Blueprint & Gap Analysis

Texas Gap Analysis

Florida Strategic Plan Forward

Where Does NC Stand?

In Support of Sustainable Future: Responding to Needs in New Jersey

What supports do people need?


• What is the service array that individuals need and prefer?• What is being paid for services and supports?• What outcomes for people are sought?• What are the desired social roles and responsibilities?• Is the current overarching service model appropriate?

Database Invaluable

• Information about people served and service use is needed

Do you know the number of people served, where they are, their services, rate schedules, related expenditures in

relationship to their support needs?


Can you bring the two together?

Low correlation High correlation


What if service definitions and service expenditure data were

developed?


Examine desired service package for people related to their support needs.

Think of the Challenges Faced By Policy Makers…

• Budget stress

• Accelerating service demand and waiting lists

• Reliance on legacy and inefficient systems

• Workforce shortages

• Continued push for community integration, participation, contribution…self-direction.


Decisions Made

Future System

Issue 1. What Goals Are Important?


Reliance on Legacy Systems…It’s A Living Museum ...Can this be efficient?

Group Homes

Sheltered WorkDay Habilitation

Public Institutions

IEP, ISP, IHP, IWRP, IFSP, IPPFamily

Support

Supported Work

Token

Economies

Supported

Living

1956... 1962... 1972 ... !976...1983... 1987.. .1992... 1997.. 2000... 2003…2006…2009

Customized Employment

Apartments

ICFs-MR

Self-determination


There is a wide range of DD waiver expenditures among states (Lakin 2008):

Year Least to Most Avg. Annual

1997 1 to 5x $27,7802000 1 to 16x $33,1132002 1 to 9x $35,7072009 1 to 5x $43,395


What percentage of their waiver budget in FY10 did the 5% most expensive people require?

WI HI 18%WY 15%

VT, MI 14%NM, DC, NH 13%

GA 10%


States Face a Big Problem…

Gary Smith, HSRI

Wait List

IncreasingService Demand

Resources


Waiting for Residential Services

People WaitingResidential

Services Recipients

% of Growth Needed

114,916 436,866 23%

People with ID/DD on a waiting List for, but not receiving, residential services on June 30, 2008HSRI finds states with 300 people served by waivers per 100,000 citizens have minimal or no waiting lists

Lakin, Larson, Salmi, & Scott (eds.) (2009). Residential Services for People with Developmental Disabilities: Status and Trends Though 2008

Potential Policy Goals

Fairness, equitability, explicability Increase efficiency to address increasing demand Matching resources and individual needs Ability to handle exceptional care In a time of limited resources - focus on those with

greatest need Inject self-directed approaches


Issue 1. What Goals Are Important?

Heading for a Crash!


Budget Shortfalls

Weighty Legacy Services & Structures

Workforce Shortages

Quality Problems

Rising Unmet Demand

Antiquated Technologies

Fragmentation

What To Do?

We can’t stay on

this spot

We need to rethink what we do – affirm our values but resolutely search for “value”

23Human Services Research Institute

We Must Make Our ServiceSystems More Efficient & Equitable

Reform our person-centered system architecture Disinvest from low value/high cost services Utilize Medicaid Efficiently! New business models… Open markets “Non-traditional” providers/direct purchase of

supports


State DD Directors Have Taken Some First Steps• Fewer than 35,000 individuals are living in

institutions; by 2010, 10 states have no institutions costing $60,999 (avg in 2008 )

• Residential options are getting smaller with 14 states having 90% of individuals in 6 person or smaller settings costing $51,179 (avg in 2008 ),

• ICF-MR/DDs are “out”; Waiver services are “in”

• States are investing in “in-home supports” through supports waivers

• States are looking at how to allocate resources to individuals


Efficiency & Equity

Efficiency gains come from understanding exactly what it costs to provide a service at a given level of quality for a particular type of person. Most state developmental disability agencies, however, know little about per person actual costs.

Equity requires understanding what supports individuals need, and a fair allocation of resources to address personal needs. Few systems have assessment processes that translate directly into resource allocations. Over time decisions made about expenditures often appear idiosyncratic and unfair.


Highest Cost

Lowest Cost

People with Developmental Disabilities(1% of the population)

Big House State Op ICF-MRs

CommunityICF-MRs

HCBS WaiversComprehensive & Specialty Waivers

Supports Waivers

State Funded Services

DEMANDAbout 4% more per year

An Overall Look at Things


The idea is to nudge a system down the incline to reduce per person expenditures.

The ETERNAL QUESTION:

How do we deliver what we have to the people who need it most ?


Robert T. Clabby, II Oregon

Human Services Research institute 29

Most people… and MOST expensive

Fewest people…

and LEAST expensive

Most people… and LEAST expensive

Fewest people… and MOST expensive

Moving a system from left to right…

The idea is for… people to get what they need, no more and no less. Generally, allocations in a system will show that the greatest number of

people require less support, and so should receive fewer resources per person. There should be fewer individuals with extraordinarily high allocations.

Sometimes, systems become disordered and the pattern shows great numbers of people receiving high allocations.

Don’t forget:

A stakeholder group should be formed: To help advise the process To assure that people know what the

process is finding and what decisions are being made.

The stakeholder group should meet regularly and be composed of self-advocates, parents, providers, and others.

Stakeholder Involvement


Things to Consider when Choosing an Assessment Tool

Assessment tools provide information about support needs

States use various tools to tie funding to support needs

Each tool has its pros and cons


Issue 2. How does a state choose a tool to measure support needs?

Why do states pick the Supports Intensity Scale?


National norms – buying the bell shaped curve

Writing waiver service plans with individuals, families, and providers

Captures support needs hence some of the natural supports used by individuals

Considers both behavioral and medical challenges

Has potential for helping to shape waiver individual budgets and/or reimbursement levels

What is the SIS? Developed and released by AAIDD in 2004 Originally designed to support person-centered planning,

not funding Only adult version available – child version is under

development Currently 14 states and 14 countries using SIS Perceived as strength-based Must be purchased/licensed from AAIDD


The Supports Intensity Scale (SIS) and how it is being used

Supports Intensity Scale Administration: Interview the person and

others who know the person. Requires solid interviewing skills

Measures general support needs of an individual producing a number of scores

Includes basic support need areas like: A. Home Living Activities, B. Community Living Activities, and E. Health and Safety Activities SIS ABE – refers to the sum of the scores for these 3

areas that have been found useful in helping resource allocation

Identifies Medical and Behavior problems which are also significant cost predictors


SIS and State Funding Models

Georgia – is using the SIS to develop individual budget allocations for 11,522 people since October 2008 for their new support and comprehensive waivers

Washington: linking SIS and other information to levels of payments and amounts of support services and is expanding from residential to include employment

Louisiana: informally using a SIS-informed funding system with 2,013 new NOW waiver applicants beginning in January 2009

Hawaii, Rhode Island, Maryland, Missouri, New Jersey, New Mexico, New Hampshire, North Carolina, Virginia, and Utah are exploring SIS applications for resource allocation

Oregon and Colorado are using SIS to inform their waiver reimbursement models

Alberta, Canada is rolling out a three year SIS resource allocation initiative


“Buying the Bell Shaped Curve”


HCBS Waivers Working Together


State SIS Comprehensive Adult Waiver Results

State People

Total SupportNeeds Index

Score (Range 54-143)

MedicalSupportNeeds

(Range 0-32)

BehavioralSupportNeeds

(Range 0-26)

SIS Norms 1,306 100.00 2.47 4.99Missouri 5,728 95.34 2.32 4.34RI 465 98.70 2.84 5.50OR 401 101.00 3.27 4.98NE 288 100.42 3.23 4.81CO 4,014 100.53 3.11 6.99VA 521 101.74 2.43 4.77GA 5,269 98.23 1.96 3.81UT 3,503 99.95 2.12 4.15


Oregon


Virginia Rhode Island

Georgia Missouri

Comprehensive HCBS Waiver SIS Results – Similar Shapes

Colorado

State SIS Support Adult Support Waiver* Results

* http://aspe.hhs.gov/daltcp/reports/2007/gaugingfr.htm

State People

Total SupportNeeds Index

Score (Range 54-143)

MedicalSupportNeeds

(Range 0-32)

BehavioralSupportNeeds

(Range 0-26)

SIS Norms 1,306 100.00 2.47 4.99

CO SLS 2,530 92.32 2.78 2.93

GA NOW 5,023 90.94 1.26 1.75

LA NOW 7,770 95.68 2.39 2.68

MO Support 579 90.67 2.43 2.68

Human Services Research Institute40

HCBS Support WaiversSIS Results – Similar Shapes

Colorado SLS

SIS Support Needs Index Scores

Georgia NOW Louisiana NOW Missouri Community.


Full population or random pilot sample?

A good database is invaluable… whether a pilot is used or everyone

Many factors explain variance

All the predictors work together as a team

The techniques are often powerful enough to be able to overcome minor error and work well

Allocations and plans are based on the “FOUR Ps”… Personal, portable, prioritized, predictable


Issue 3. Full Population or Random Pilot Sample?

½ like it all & ½ like it small

HCBS waiver reimbursement is

not rocket science. It is a lot harder.

Gary Smith


HSRI is designing the financial architecture for DD/ID service systems


Set Levels & IBAs

Implement

Prepare

Collect Data

Overview of the Strategic Planning Process

Developing Individual Budgets In Relation to Service Payment Rates

Compile the

Collected Informatio

n

Collect Information

on Individuals

Assign Individuals

to Assessmen

t Levels

Set Individual

Budget Allocations in Relation to Rates

Review Findings in Relation to Policy Goals

Consider Implementati

on Issues

Set Policy Goals

Choose Assessment Measure

Engage Stakeholde

rs

Plan for Implementa

tion

Human Services Research Institute45

Implement New

PracticesReview

Provider Reimburse

ment

Reconcile Levels and

Rates

Issue 4. What cost/expenditure data are states using to build IBAs and Adjust Rates

• Do we really know what it costs to serve a person?

• Why are some people allocated more that others, even though they have similar needs?

• Is the way we allocate funds fair? Is it based on support needs?

• Is this efficient?

• Several states are working to assess needs systematically and allocate accordingly


Person-Centered Budget Allocations

Adjusted Service Reimbursement

Rates

Determine what variables correlate highest with expenditures;

Given analysis of support needs and the support they receive …

Individuals are assigned to an “Level Budget Allocation ”

-- OR -- Individuals are given their own unique “Individual

Budget Allocation;”

A “best fit model” is built to align individuals and their needs with budget allocations;

These findings are reconciled with the rates associated with payments to service providers.


Several steps in the process



Budget Allocations Per Level

SIS Results

Individual Budget Levels

ReconcileBudgets & Rates

Proposed New Rate Structure

Cost Reviews Per Person and Service

ReconcileBudgets & Rates

Proposed New Rate Structure

Cost Reviews Per Person and Service

SIS Results

IndividualBudgets

Alignment

LBAs IBAs


Essential Secret Step: Setting Individual Budget Allocations and Adjusting Rates



Defining Individual Budget Allocations

Given that the field is moving toward individualized budgets, it is essential for policy makers to be precise in what is meant by an “individual budget allocation” (IBA).

Dollar amount tied to needs, total budget Individual decides how to use the full

amount New budget is prospective rather than

retrospective

Questions to be answered…


What does CMS require of individual budgets?

Cost and utilization data should form the vital underpinnings of good individual budget development.

Consistent methodology should be used for all involved participants, and individual budgets should be reviewed regularly.




What liability does the state face if it cannot fund

the individual budgets?

In the United States the range of funding of DD

services varies greatly (over 5 times lowest to

highest state).

States generally change the individual budgets to

meet their legislatively approved budget.

Rates for services, though benchmarked for national

costs, may be a percentage of the national cost. For

example, last year Colorado or Utah were paying

about 75% of costs in rate studies.



Is there a more objective and rational way to support the service needs of the individuals we serve in communities?


What is the best way (in a technical sense) to make it work?

Issue 5. What can be done to improve the relationship between assessed individual support needs and resulting allocations/expenditures?

Issue 5. Improve relationship between needs and allocations

Before a new model is implemented… Several steps must be completed…

The findings and proposed models must be considered in relation to initial policy goals.

Impacts on individuals, providers and the system must be considered.

An “exceptions protocol” must be developed. Potential dislocation in the system must be considered. Needs for improved infrastructure must be considered. A detailed implementation plan must be compiled, and then

enacted. Human Services Research Institute 54


Issue 5. Improve relationship between needs and allocations

The HSRI approach to assigning individuals to individual budgets or budget levels:

Identify people with similar characteristics.

Group these individuals based on resource consumption patterns.

Develop budget levels or individual budgets in ways to :

Establish face validity Have a logical progression from least to most needs

Check the progression in the number of people per category… ideally the most people populate the budget levels indicating less need.

Account for all those assessed

Establish separation between budget levels (hours and/or costs)

We are looking for a “Best Fit Solution”

“It is impossible to individualize service until you have individualized the funding.” Russ Pittsley


http://search.msn.com/images/details.aspx?q=man+face&color=both&size=1p&ht=467&wd=360&tht=128&twd=98&su=http://www.sff.net/people/cboyke/oldmanface.html&iu=http://www.sff.net/people/cboyke/oldmanface.gif&tu=http://images.picsearch.com/is?250352412937&sz=136


Colorado Level Model

Fits Individual SISresults from

Oregon

Colorado and OregonIssue 6. How are states developing budget models

when they have more than one HCBS waiver?


Community Safety Risk Two Levels

6 Levels and 42 subgroups of Support Needs with Medical and Behavioral

In Colorado


For CO 6 Levels of Funding Were Used

6 levels of funding were identified to better match individual support needs with funding based on:

4 groups of SIS general adaptive scores

42 subgroups of SIS Medical, SIS Behavioral and SIS adaptive scores (ABE ) and a community safety risk factor

In the community, as the levels increase from 1 to 6 the overall support needs of the individuals increase as do dollars


We Used the Solution in CO to support ORCO’s 6 Levels Offered a Better Fit Solution

We thought that a SIS configuration used in Colorado may offer a better fit solution.

Work involving the CO Comprehensive Waiver was completed using “full population SIS results” (n=3,631)

The SIS configuration applied there uses six levels composed of 42 detailed subgroups.

We tested for differences between the OR sample and CO full population. We found that the two are comparable.

Applying it to the Oregon sample provides opportunity for “fine tuning” assignments to levels


Levels Adult Residential

People in Sample

Type of Need

1 70 Milder Support Needs

2 49 Moderate Support Needs

3 51 Severe Support Needs (SN)

4 30 Severe SN with Moderate Behavior & Medical

5 63 Severe SN with More Serious Behavior & Moderate Medical with Community Safety 30%

6 56 Severe SN Extraordinary Medical and Behavioral with Community Safety 50%

Six Assessment Levels

6


6 Levels for “DD50” Adult Residential ServicesLevels ABE Medical

ProblemsBehavioralProblems

Risk DD50 Staff Direct Hours

1 24 1 2 0 6

2 29 2 4 0 7

3 32 3 5 0 7

4 34 4 6 0 10

5 34 5 6 30% 12

6 35 7 9 50% 12


6 Levels Offers a Better Fit Solution because of… Adding another level improves managing of

the “spread” in the sample pertaining to the relationship between assessed needs and dollars or service hours

Separation between levels in dollars and service hours is improved

Exceptional care and cost cases are better accounted for

Overall, it allows for improved assignment to levels for individuals, and improved ability to assign budget allocationsIssue 6. How are states developing budget models when they have more

than one HCBS waiver?


Support Levels People Average Median

1 1,111 10,818 $10,200

2 705 14,866 $14,279

3 210 18,040 $17,434

4 150 18,172 $17,723

5 176 18,820 $18,685

6 177 18,751 $19,340

Total 2,529 14,094 $13,131

ColoradoSupports Waiver

Individual Budgets by Six Levels

We collapsed the levels from 6 to 4…(next slide)


SLS Spending

Cap*

Support Levels

Number of People

Average Paid Claims for

FY08

Median of Paid Claims

for FY08

A 1 1,111 $10,818 $10,200

B 2 705 $14,867 $14,279

C 3 & 4 360 $18,106 $17,582

D 5 & 6 353 $18,786 $19,059

Total 2,529 $14,095 $13,131

*Fortune, et.al. Colorado Supported Living (SLS) Waiver. (February 2009). HSRI. Portland, OR. Colorado will reexamine these levels and dollars in the spring of 2009 due to budget and economy restraints.


The model uses SIS results to currently provide individual budgets for 11,522 individuals on the state’s new comprehensive and support waivers.

This individual budget model explains over 75% of the variance and is in the second year of phasing to reduce impacts with three more phasing years planned.

Georgia’s Resource Allocation System for two new waivers since November 2008

Issue 6. How are states developing budget models when they have more than one HCBS waiver?


Ranking of Individuals

NOW WaiverN= 4,885

Comprehensive WaiverN= 5,142


Issue 7. How do budget models accommodate individuals with exceptional care needs and related costs?

Do these individual budget allocations or

individual budget levels ever need adjustment? Any reimbursement method requires some way to adjust to

changing circumstances and sometimes unfortunate new

challenges presented by the individuals we serve.

Some of the best, highly tuned individual budget systems allow

adjustments for exceptional cost and care for 7% of the

population served.


1. Identify and separate individuals who need and cost more.

2. Develop rules and procedures and designate staff to handle the process for adjusting or making exceptions.

3. Develop waiver safeguards that come into play when the amount of the limit is insufficient to meet needs.

4. Convene a committee to review individuals who do not fit within the model.

5. Adjust budget allocations to raise or lower amounts, as needed.

6. Decide to leave high allocations unchanged, after review.

7. Remove any individual deemed to have extraordinary needs and associated costs from the budget model.

Issue 7. How do budget models accommodate individuals with exceptional care needs and related costs?


Issue 8. How often should states reassess support needs?

State Number of Years for SIS Administrations

GA & LA 1 yearVirginia 3 yearsMissouri 3-5 yearsColorado 4 yearsOregon 5 years


Issue 9. How should states roll out their assessment-informed resource allocation models?

(everyone uses phases!)


(everyone phases)

These are various ideas that states have used:

• Individuals on waiting list first

• One waiver at a time

• Level assignments first by different waiver services

• Individual budget assignment with rate work coming first or last

• Everything new but then phased to reduce impact over 5 years

• Do least currently costly people first


Issue 10. What should states do when new people are added, state budgets are reduced, and there is a need to keep rates current and reconcilable?

Virginia showed expenditures aligned with SIS levels in prototype & Louisiana broke the impasse with its waiting list using the SIS guidelines


Virginia System Model Level Prototype

Fits Individual SISresults from

Louisiana

Virginia and Louisiana

Levels Number of

People

SIS SUM of ABE

Standard Score

Average

SIS Section

3a Medical

Total Average

SIS Section 3b Behavior

Total Average

Total Nov 06-Oct 07 Average

Level 1 200 24.94 1.17 2.38 $49,792

Level 2 151 33.43 2.30 3.42 $61,857

Level 3 37 40.95 2.54 3.57 $63,056

Level 4 35 27.23 1.89 8.51 $66,717

Level 5 30 39.13 12.23 4.07 $72,765

Level 6 68 33.01 2.32 13.82 $79,585

Total People 521 521 521 521 521

Average 30.56 2.43 4.77 $60,579

6 levels of funding were identified in Virginia to better match individual support needs with funding based on:


LA Objectives - Draft ModelProduces a guideline amount and reference point to set the basis for planning so that 2,013 people could move from the registry (waitlist) to the waiver

Not all of the recommended amount has to be used

If more units/$ are required, additional authorization can be sought for individuals with special circumstances


LA Objectives – 2 Draft Model

2 models:– Living with

family– Independent

living

Living Arrangement X

SIS LevelBase Rate(Units/$)

Age + Units/$

Natural Supports + Units/$

Day Activities - Units/$

Recommended IFS/ACS Units/$


Lots more information from HSRI at: http://www.sageresources.org/

http://www.sageresources.org/

Questions?What did he say?

ten issues to consider when implementing individual or level-based budget allocations

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