Funding Shift in RI Developmental Disabilities Budget Falling Far Short of Goal

By Gina Macris

Rhode Island Governor Gina Raimondo’s strategy for funding federally-mandated reforms to developmental disability services is in trouble, according to updated figures that emerged in a Senate Finance committee hearing Tuesday. 

Raimondo’s proposed budget puts an overall price tag of $24.1 million on expanded community-based services funded through the Department of Behavioral Healthcare, Developmental Disabilities and Hospitals (BHDDH) over the next 14 months to satisfy a first-in-the-nation consent decree designed to correct violations of the Americans with Disabilities Act (ADA).

         MARIA MONTANARO

        MARIA MONTANARO

The BHDDH budget plan relies on a total of $19.3 million savings in group home costs to pay for most of that $24 million bill, but the actual savings are materializing at a trickle. BHDDH director Maria Montanaro told the Senate Finance Committee only $200,000 in reductions are expected by the end of the current fiscal year June 30.

The $200,000 savings comes from an increase of 21 individuals who have moved from costly group home care to less expensive shared living arrangements since the start of the current fiscal year July 1, 2015, a BHDDH spokeswoman said Wednesday. In the last ten months, the total number of individuals in shared living has risen from 267 to 288. BHDDH had projected 100 new additions to shared living by June 30 of this year and 200 more in the next budget.

The $200,000 in savings is less than a tenth of the $3.1 million in housing cost reductions that BHDDH had hoped to realize in the current budget. 

The figures raise big questions about a huge revenue gap in Raimondo’s plan, which is due for its next review in U.S. District Court Monday, May 2 at 1:30 p.m. before Judge John J. McConnell, Jr. The state faces contempt proceedings and fines if it fails to adequately finance supported employment and other community-based services as required by the consent decree.

On Tuesday, the gap between projected and actual savings in the BHDDH budget caught the attention of Sen. Louis DiPalma,  (D-Newport, Middletown, Tiverton and Little Compton), who chaired the hearing.

DiPalma questioned Montanaro sharply.

“What are we doing about achieving $16.2 million?” he asked Montanaro, referring to the lion’s share of the $19.3 million cut in group home costs that is projected for the next fiscal year. 

First Montanaro said it is possible BHDDH will meet the targeted $16.2 million in savings as more individuals move into shared living.

“The pace will be slow,” she said. Shared living is “a completely voluntary activity.” Families are making a decision about something that is “a new concept and a scary concept.”

“With that said, I believe the target for (fiscal) 2017 will be realistic,” Montanaro said.

The goal may be possible, DiPalma said, “but the probability is zero.”

Exacerbating the financial situation at BHDDH is the short-term failure of a plan to shift a total of $4.4 million in professional services like physical and occupational therapy out of the BHDDH budget to Medicaid Managed Care. After BHDDH officials sent out letters in February telling clients to seek reimbursement directly from Medicaid, the Division of Developmental Disabilities received numerous complaints that individuals were, in fact, being denied services.

BHDDH rescinded the move in a subsequent letter of apology sent to consumers and families, at the same time nullifying planned savings of $2.2 million through June 30. Christopher Feisthamel, chief financial officer of BHDDH, said after the hearing Tuesday that the Executive Office of Health and Human Services (EOHSS) hopes to eliminate some of the bureaucratic hurdles that stand in the way of that cost-shifting during the next fiscal year. He could not be more specific.

DiPalma, meanwhile, indicated after Tuesday’s budget hearing that legislators will have a clearer idea of where BHDDH stands after the May revenue estimating conference, which concludes May 9. At the twice-yearly conference, the top fiscal officers for the governor and each legislative branch reach consensus on estimates for state revenue and caseload expenditures that are used in final budget deliberations.

Montanaro’s testimony put the shift toward shared living in a philosophical and budgetary context.

The single underlying principle of the Rhode Island consent decree and similar settlements in other states is that the “state should try very hard to move to the most inclusive, community-based system possible,” she said. Supported housing and shared living is part of that movement, she said.

“It’s not going to happen overnight,” Montanaro said.

At the same time, “we are faced with a targeted goal from OMB (the state Office of Management and Budget). There are very few places we can go to make those cuts,” Montanaro said.

Seven years of rate cuts to the private agencies that provide most of the developmental disability services in Rhode Island “have dramatically weakened the system,” she said. These funding reductions “have left clients very vulnerable.”

After a devastating cut of more than $24 million in the 2011-2012 fiscal year, the General Assembly has added a total of $18 million to the Division of Developmental Disabilities in succeeding budgets, but none of that money has reached the private service providers, according to Tom Kane, CEO of Access Point RI.

Instead, the money repeatedly has gone into plugging a structural hole in the BHDDH budget, he said.

Kane warned that if a $5.2 million supplemental increase to the current budget is not carried forward to the next fiscal year, the structural deficit will continue and the money Raimondo has set aside to shore up the private agencies will once again be diverted, threatening the stability of the entire service system. 

Earlier this month, Kane told a House Finance subcommittee that the private agencies operate at a loss of $5,700 a year for each person they employ, because the state does not cover the full amount of employer-related taxes and benefits.

On Tuesday, he indicated that said that if the agencies are forced to continue operating in the red, “there will be fewer of us next year.”

The General Assembly must “stabilize the system,” Kane said.