By Gina Macris
Rhode Island Governor Gina Raimondo’s budget for developmental disability services creates a dramatic imperative for cost-cutting during the next fiscal year, one that would reduce spending by a total of $21.4 million in state and federal Medicaid funding.
Developmental disability administrators are exploring the option of a pilot Medicaid program with a 90 percent federal match called a Health Home to fill in the gap, but have not yet determined whether it is feasible, and if so, to what extent.
The overall $21.4 million reduction represents the difference between the governor’s $272.7-million proposal for resolving the current deficit in developmental disabilities and the lowered spending ceiling of $250.8 million for the next budget cycle. The budget reduction would involve slashing $18.3 million in reimbursements to private providers and cutting almost $3.1 million from the state-operated network of group homes effective July 1.
Raimondo’s budget numbers reflect a central tension between those who believe that the state simply spends too much on Medicaid entitlements and those who believe that services for adults who struggle daily to cope with developmental disabilities have been chronically underfunded.
Raimondo’s plan for the 2019 fiscal year beginning July 1 treats a multi-million dollar deficit in the existing budget as a one-time event, while the record of the last several years shows that the shhortfall in developmental disability spending is a chronic or structural problem in which the actual cost of authorized Medicaid services exceeds the budgeted figure.
In addition, Department of Behavioral Healthcare, Developmental Disabilities and Hospitals (BHDDH) officials have made it clear that an improved assessment for gauging individuals’ support needs has been resulting in higher per-capita costs. The conversion from the old assessment to the new one, a process which started in November, 2016, is expected to take another year or two to complete as clients of BHDDH undergo re-assessment, one by one.
BHDDH officials did discover incorrect implementation of some questions in the cases of 46 individuals assessed with the new instrument, resulting in financial authorizations that were higher than appropriate.
In a recent interview, Rebecca Boss, the BHDDH director, said assessors have been retrained on exactly when they should ask those follow-up questions about behavioral and medical needs. The department has no intention of discontinuing the assessment, she said.
For the 2019 fiscal year, BHDDH officials have an idea about how to bridge the funding gap that they say makes both fiscal and programmatic sense.
The idea involves a new approach to case management for adults with developmental disabilities called the Medicaid Health Home. The approach would bring in significant increases in federal money, but the concept has yet to be fleshed out. And the state is only considering a pilot program to test the model.
Successfully implementing the new Health Home option appears to be the state’s only safety net to protect the developmental disability service system from service reductions, waiting lists or rate cuts to providers.
In her budget message, the governor promised to reduce neither eligibility nor services for Medicaid recipients, which include adults with developmental disabilities.
Boss, the BHDDH director, was reminded of Raimondo’s pledge and was asked whether maintaining existing levels of eligibility and services would mean cutting reimbursement rates to service providers.
Boss said, “I don’t think the department is ready to go to a rate cut” to service providers.
Boss said BHDDH has scrapped a plan for reducing reimbursement rates to providers for a relatively small number of group home residents during the third quarter of the current fiscal year.
The state’s private providers of developmental disability services have been struggling financially for years.
“The fiscal stability of our providers is very important to us,” Boss said. BHDDH counts on its private providers to enable the state to comply with demands of a 2014 federal consent decree which invokes the integration mandate of the Americans With Disabilities Act in requiring Rhode Island to end its over reliance on segregated daytime care and sheltered workshops for adults with developmental disabilities.
Boss said the budget for the next fiscal year contains $6.8 million for reimbursements to private providers for delivering supported employment services required by the consent decree. That’s $2 million more than is expected to be paid out by the end of the current fiscal year for employment-related supports.
The possibility of assigning case management – or coordination of care – to a third-party through a Medicaid Health Home is appealing to BHDDH officials for a couple of reasons.
Using the Medicaid Health Home approach could save the state significant sums of money in the short term. States can apply for an enhanced federal reimbursement rate of 90 cents for every state dollar expended for a maximum period of two years, according to the Centers for Medicare and Medicaid Services.
The current federal Medicaid reimbursement rate is a little more than 50 cents on the dollar. Medicaid funds all developmental disability services in Rhode Island.
The concept also could solve a looming compliance problem with federal Medicaid regulations.
In the next few years, the Medicaid Final Rule on Home and Community Based Services will require case management to be conflict-free. That means it must be divorced both from funding agencies, like BHDDH, and from providers who have a vested interest in billing for services.
BHDDH now has about 24 in-house social workers who coordinate services for some 3,700 adults with developmental disabilities.
The Health Home option, a managed-care arrangement which pays a per-capita rate, was first introduced as part of the Affordable Care Act in 2010 and was crafted to encourage providers of medical care to take a holistic approach to their patients’ well-being.
To what extent the objectives of Health Homes encompass the social services has yet to be determined.
Boss indicated that many questions remain unresolved, such as:
- Which clients of the Division of Developmental Disabilities would qualify for Health Home coverage?
- What kind of entity would be equipped to serve as a Health Home for case management, and possibly other services?
According to the Center for Medicare and Medicaid Services, (CMS) Medicaid clients eligible for Health Home coverage must have at least two chronic conditions, or one chronic condition, with risk for a second; or have a serious and persistent mental health condition.
It is not unusual for individuals with cognitive challenges to also struggle with mental health issues or chronic medical conditions, or both.
CMS says that Health Homes may offer what it calls comprehensive care management, as well as care coordination, health promotion, comprehensive transitional care follow-up, patient and family support, and referral to community and social support services.
Boss envisions a two-year pilot program for the Health Home model, beginning sometime in the next fiscal year.
Here are the overall budget numbers, which reflect all sources of funding for all developmental disability programming, both state operated and private:
Fiscal Year 2018
- Currently authorized: $256.9 million
plus $15.3 million
- Governor’s proposal: $272.2 million
Fiscal Year 2019
- Governor’s FY 18 revised budget: $272.2 million
· minus $21.4 million
- Governor’s proposal: $250.8 million
The $21.4-million reduction includes a cut of nearly $12.5 million in state funding and a loss of $8.4 million in federal Medicaid reimbursements, according to the budget proposal. Other miscellaneous pluses and minuses round out the $21.4 million total cut.
After the first quarter of the current fiscal year, the Division of Developmental Disabilities was overspending at a pace of almost $26 million in federal and state Medicaid funding, including a state share of $12 million.
But a second-quarter spending report shows the projected deficit for developmental disabilities has shrunk to about $15.7 million, including about $5.8 million provided by the state and nearly $9.9 million in federal funds.
The governor’s proposal covers nearly all of the $15.7 million shortfall. The remaining gap concerns a bookkeeping question: whether BHDDH or the Executive Office of Health and Human Services should be charged for the state’s contract with the independent consent decree monitor.