By Gina Macris
The state of Rhode Island has hired NESCSO, the non-profit New England States Consortium Systems Organization, to review the fee-for-service Medicaid funding structure used to reimburse private providers of services for adults with developmental disabilities since 2011.
The project, launched by the Department of Behavioral Healthcare, Developmental Disabilities and Hospitals (BHDDH), represents a key step toward meeting the overall objectives of a 2014 consent decree which requires the state to create a community-based system of services to correct violations of the integration mandate of the Americans With Disabilities (ADA.)
The current fee-for-service reimbursement model, called Project Sustainability, incentivizes facility-based, segregated services, according to findings of the U.S. Department of Justice which led to the consent decree.
Project Sustainability, accompanied by $26 million in budget cuts effective July 1, 2011, resulted in drastic wage reductions among private service providers, but raising worker pay alone will not fix the problem.
Project Sustainability also was set up to fund staffing for groups of people engaged in activities in one place but didn’t provide for the degree of supervision or transportation needed to individualize services in the community on a broad scale, as required by the Olmstead decision of the U.S. Supreme Court. That decision re-affirmed the integration mandate of the ADA.
In sheltered settings, for example, the ratio of direct care workers to clients might have been set in the funding formula at 1 to 10, but additional staffing would be needed to support that many people in the community, according to language in the contract between NESCSO and BHDDH.
The contract says supplemental payments have been used to “address the deficiency in the payment rates.” These supplemental payments “are an increasing portion of overall payments, reflecting the inadequacy of the current rates,” the contract said.
It says BHDDDH is seeking technical assistance from NESCSO in reviewing the best strategies for achieving an integrated, individualized system of services that complies with both the consent decree and the Medicaid Home and Community-Based Services Final Rule.
The consent decree affects daytime services, with an emphasis on competitive employment for adults with developmental disabilities.
The Home and Community-Based Final Rule (HCBS) is Medicaid’s interpretation of what the ADA’s integration mandate should look like in practice. Unlike the consent decree, it addresses residential services, calling for options that enable clients to live in less restrictive settings than group homes.
BHDDH also asks NESCSO to help it develop an “optimal and balanced system of services and payments” that will promote individually-designed programs according to the preferences and direction of the consumers themselves.
As part of the overall picture, the design and oversight of individual service plans would be separated from funding and actual delivery of supports to protect the interests of consumers and comply with the HCBS Final Rule in so-called “conflict-free case management.”
The consent decree also calls for a separation between funding, case management, and delivery of services. Currently, BHDDH is responsible for both funding and case management.
The total contract, designed for an 18-month period, will cost nearly $1,366,000 in federal and state Medicaid funds. That sum includes the entire developmental disabilities project, a rate review for behavioral healthcare services, and technical assistance at Eleanor Slater Hospital in connection with developing outpatient services for patients.
A BHDDH spokeswoman said Feb. 28 that the amount to be spent in the current fiscal year on the developmental disabilities portion of the project, originally set at about $400,000, will be scaled back to $200,000, because the work did not begin as anticipated in January. The fiscal year ends June 30.
There is $500,000 budgeted for the developmental disabilities work in the fiscal year beginning July 1.
BHDDH director Rebecca Boss said the department “Is pleased to partner” with NESCSO.
“NESCSO offers BHDDH the expertise of the other New England states and brings a team with background in specialized population-based needs and solutions, financial expertise, analytical depth and knowledge of federal regulation, resources and compliance requirements,” she said.
NESCSO is a non-profit collaboration among the health and human services agencies of Rhode Island, Massachusetts, Connecticut, New Hampshire and Vermont and the University of Massachusetts Medical School. Through shared information and expertise, it works to promote policies and programs that will serve the needs of New England states in a cost-effective manner, according to its website.
State Sen. Louis DiPalma, D-Middletown, the chairman of special legislative commission studying Project Sustainability, said the review of the funding model will be “pivotal” in shaping the future of the private system of developmental disability services.
“I give the department (BHDDH) credit” for moving forward with the project, DiPalma said. NESCSO, led by a former Rhode Island Medicaid director, Elena Nicolella, is held in high regard, he said.
At the same time, DiPalma said it is imperative that the review of the funding structure begin immediately and be completed in time for Governor Gina Raimondo to submit her budget proposal to the General Assembly for the fiscal year beginning July 1, 2020.
Expert testimony already given to the Project Sustainability commission made it clear that a review of the funding structure was long overdue, DiPalma said. With BHDDH already taking that step, the commission might still say that a rate review should be conducted every five years, as recommended by healthcare consultant Mark Podrazik.
Podrazik is a principal in Burns & Associates, which was hired to help BHDDH develop Project Sustainability. Testifying in November, he made it clear that the state ignored some of the firm’s key recommendations, instead shaping the funding structure through a frenzy to control costs.