Delivery of Care

Why did the state cut $26.5M in funding for adults with development disabilities?

A 2011 memo reveals the implausible rationale behind the decision: the idea that providers could deliver the same services for 13 percent less money

Photo by Richard Asinof

A 2011 memo unearthed in a public records request by reporter Gina Macris detailed the reasoning why the R.I. General Assembly cut $26.5 million in funds to support services for developmentally disabled adults.

By Gina Macris
Posted 5/1/17
A newly unearthed memo by reporter Gina Macris uncovers the implausible rationale used by the R.I. General Assembly to cut some $26.5 million in state funding for the care of adults with developmental disabilities. The funding cuts precipitated a tailspin the system delivering services, leading to a consent decree by a U.S. District Court Judge in 2014.
Was there a conflict of interest in the way that Project Sustainability was introduced as a resource allocation tool? What are the potential penalties that the state could be assessed for failure to live up to the court-ordered consent decree? How involved is Jennifer Wood, the former deputy director at R.I. EOHHS until she was demoted in January, with efforts to address gaps in developmental disability funding? In a year of challenging budget decisions, will the needs of adults with developmental disabilities, some of the state’s most vulnerable citizens, be a priority?
As the number of reporters covering local news in printed newspapers such as The Providence Journal continues to decline, there has an upsurge in online reporting offering high-quality content. In addition to ConvergenceRI and Gina Macris with Developmental Disability News, there is also ecoRI News, RI Future, and Johanna Harris with Providence Rules, among others.
We live a world where much of the news is homogenized into bite-size, palatable sound bites, enticing viewers and readers with click-bait. The fourth estate is alive and well in Rhode Island, despite the decline in circulation in printed publications, steadily gaining traction and followers.
The Olmstead consent decree is a 2014 agreement between the state of Rhode Island and the U.S. Department of Justice that requires the state to correct violations of Title II of the Americans With Disabilities Act by shifting its service system from sheltered workshops and segregated day programs to community-based supported employment and integrated non-work activities over 10 years. The legal basis for the consent decree is the 1999 Olmstead decision of the U.S. Supreme Court, which re-affirmed Title II of the ADA, saying that services for individuals with disabilities must be delivered in the least restrictive environment that is therapeutically appropriate.

Project Sustainability is the regulatory structure defining the service system for adults with intellectual disabilities in Rhode Island that was introduced by the R.I. General Assembly in the budget for the fiscal year 2012. It includes use of the Supports Intensity Scale as a tool for determining individual funding allocations, according to five different levels of service.

The Supports Intensity Scale is a planning tool designed to measure the level of practical supports required by a person with an intellectual disability to lead a normal, independent, and quality life in society, according to the American Association on Intellectual and Developmental Disabilities, which developed the assessment and sells it.

Burns & Associates, Inc. is a “health care consulting firm that works with states on policy analysis, financial modeling, rate setting, program design, implementation and evaluation and stakeholder engagement,” according to the firm’s website.

PROVIDENCE – In a single day in 2011, the R.I. General Assembly slashed about $26.5 million, or 12.7 percent, from payments to private agencies that care for adults with developmental disabilities, some of the state’s most vulnerable citizens.

The massive cutback sent the privately run developmental disability service system into a tailspin from which it has not yet recovered, even though the dollar amount of funding has been restored.

Documents obtained by Developmental Disability News through public records requests indicate that the budget cutback was based on an unsupported assumption that the private agencies could uniformly deliver the same level of service with far less in funding.

Moreover, the records show how Project Sustainability, a set of regulations designed to assess the needs of persons with developmental disabilities and assign them a dollar value for services, seemed to function instead as an attempt to control spending – albeit with questionable success.

Today the R.I. Department of Behavioral Healthcare, Developmental Disabilities and Hospitals spends more than $21 million a year to “supplement” funding authorizations for individual clients made through Project Sustainability.

The supplemental payments amount to about 10 percent of all the reimbursements the state makes to the private agencies. Much of the supplemental funding occurs when families and providers appeal the funding determinations successfully, making the case that the original authorizations were inadequate to provide the needed services.

A spokesman for R.I. House Speaker Nicholas Mattiello defended Project Sustainability, saying that it’s brought accountability to disabilities spending.

“Project Sustainability changed a system that did not have a consistent payment model, could not provide information about what services were being provided or in what setting, and if any services were actually provided,” said spokesman Larry Berman. “It created a new billing system that could account for that.”

“All providers are paid uniform rates for the same services,” Berman continued. Previously, Berman explained, each agency negotiated with the BHDDH a monthly stipend for a bundle of services for each client.

Since 2011, the General Assembly has added $47 million to services for adults with developmental disabilities, according to Berman.

Berman rejected the notion that the General Assembly’s decision to cut funds contributed to the conditions which led to a 2014 consent decree with the U.S. Department of Justice and 10 years of federal oversight of the state’s developmental disability system, which ends in 2024.

What the U.S. Department of Justice found
In findings that led to the consent decree between the state and federal government, however, the Department of Justice linked Project Sustainability with violations of the federal Americans With Disabilities Act.

The findings said Project Sustainability restricted individuals’ access to regular jobs and non-work activities in the community – opportunities for choice that are guaranteed under Title II of the ADA.

The U.S. Supreme Court re-affirmed Title II in its 1999 Olmstead decision, saying that individuals with all types of disabilities are entitled to receive services in the least restrictive environment that is therapeutically appropriate – and that environment is presumed to be the community.

In its findings, the Department of Justice also said that the “precipitous state budget cuts in 2011” had exacerbated the problem of retaining qualified staff – a problem that today is described by providers as a “crisis,” despite an incremental pay raise to direct-care workers adopted in the current state budget for FY 2017.

Workers are scheduled to get a second small raise in the next fiscal year, according to the FY 2018 budget proposal offered by Gov. Gina Raimondo.

A short history lesson in un-sustainability
To understand how the BHDDH budgeting process veered more than $20 million off course, a history of Project Sustainability is in order.

In 2011, then-Gov. Lincoln Chafee recommended $10 million to $12 million in cuts to developmental disability services, but the leadership of the R.I. General Assembly wanted bigger reductions.

The legislature first sought to limit eligibility, but backed off when an outside health care consultant under contract to BHDDH advised against it, according to a memo obtained through a public records request.

The consultant, Burns & Associates, said restricting eligibility would probably violate the federal “maintenance of effort” requirement for federal Medicaid funding and would not be approved by the Centers for Medicaid and Medicare Services. All developmental disability services are funded through the federal-state Medicaid program.

Five days after that opinion, dated May 26, 2011, BHDDH sent the R.I. General Assembly a memo describing a “methodology” for steep cuts to dozens of reimbursement rates, most of them between 17 and 19 percent below a target rate that was established after a year’s research that included data from the providers themselves on their costs. In undercutting that “target” rate, BHDDH said that the state could not afford to spend more, the memo said.

“We did not reduce our assumption for the level of staffing hours required to serve individuals,” the memo said.

“In other words, we are forcing the providers to stretch their dollars without compromising the level of services to individuals,” the memo continued.

Craig Stenning, who was BHDDH director at the time, recently declined all comment for this article and ended a phone conversation with the reporter before any questions could be asked.

Doubling down on cuts
The General Assembly doubled Chafee’s recommended reductions in reimbursements on the basis of a last-minute floor amendment in the House, after the public had been cleared from the gallery of the chamber, early the morning of July 1, the final day of the General Assembly’s regular session that year.

The budgeted reduction was $24.5 million, but the actual cut eventually totaled $26.5 million, according to the state’s figures on actual spending.

The vote also established Project Sustainability, the bureaucratic process – still largely in place today – that the DOJ later found violated the civil rights of clients of BHDDH.

The primary elements of Project Sustainability include:

The Supports Intensity Scale [SIS], a standardized assessment designed to determine needs for an individual to accomplish his or her goals.

A formula or algorithm developed by Burns & Associates to assign funding to individuals according to one of five different levels or tiers, designated by letters A through E.

A billing system that required providers to document face-to-face time with clients in 15-minute increments in order for them to be reimbursed for day services.

Since 2010, BHDDH and the R.I. Executive Office of Human Services have paid Burns & Associates about $1.4 million to introduce Project Sustainability, develop the equation, or algorithm, and monitor its use.

Conflict of interest?
In challenging the state’s treatment of persons with disabilities in 2014, the Department of Justice found, at a minimum, “a seeming conflict of interest” in the way Rhode Island used the SIS as a “resource allocation tool,” because BHDDH both administered the assessment and determined the budgets.

Among the DOJ findings were the following:

“The need to keep consumers’ resource allocations within budget may influence staff to administer the SIS in a way that reaches the pre-determined budgetary result.”

“Numerous persons stated that this lack of neutrality, and apparent tension between the need to assess the full spectrum of an individual’s support needs and state efforts to cut costs, has negatively impacted the resources individually allocated to people with I/DD [intellectual or developmental disabilities].

“Further, we received considerable feedback from parents, family members, advocates, direct support staff, and providers that the individuals administering the SIS lack the training, qualification, or experience working with individuals with I/DD necessary to make resource allocation decisions on behalf of individuals with I/DD.”

The DOJ also said that: “We find that several formative practical and procedural barriers exist under Project Sustainability that contribute to individuals’ inability to access the resources, including funding allocations, that they need to purchase services like supported employment and integrated day planning.”

The Department of Justice also found inflexibility in the requirement that workers be “face to face” with clients for their employers to receive reimbursement for services. Through the consent decree, the “face-to-face” provision has been eliminated in a pilot program to help adults with developmental disabilities seek regular jobs in the community.

Confusion about the process
Families and service providers routinely appealed adverse funding allocations, and many of them were successful, resulting in supplemental payments for a year. But the following year, they received notice that the supplemental payments would be withdrawn, and the appeal process began all over again.

Until Stenning left office in 2015, parents and service providers were denied copies of the actual SIS scores. Some parents have said BHDDH officials told them the questionnaires, developed by the American Association on Intellectual and Developmental Disabilities [AAIDD], could not be released because they contained private proprietary information.

That’s changed. Today developmental disability officials have acknowledged that the completed questionnaires are personal health care records that must be made available to patients or their guardians, according to federal law. Still, BHDDH has never released the funding formula.

Parents also have complained publicly that social workers administering the interviews either argued with them and with providers about their responses or that they wrote down scores different from the ones offered by family members and providers.

Defending SIS
Margaret Nygren, executive director of AAIDD, which created the SIS, said it is a “well-established, scientifically valid, replicable tool” designed to measure support needs, and those who administer it must complete a “very rigorous training program” that includes an “annual recheck to make sure they are not drifting [away from] what we are training them to do.”

“It is certainly possible someone could get through the training and not apply what they’ve learned,” she said. “It’s not the kind of thing we’d like to see happen,” Nygren said. But she suggested it would be the rare exception rather than the rule.

Following the money
In December of 2015, Wayne Hannon, then deputy secretary for Administration at EOHHS, tried to get a handle on the amount of money that BHDDH spent on supplemental payments outside the regular funding authorization process. These supplemental payments are not reflected as a separate line item in the budget.

Hannon asked Burns & Associates to calculate how much money the state could save if all the supplemental payments were eliminated. In a nine-page memo, the consultants concluded that the state could save a total of $13 million if all the supplemental payments were curtailed, but they stopped short of recommending such a move, saying they did not have enough information to know if the supplements were in fact warranted or used.

In the analysis that led to the conclusion, Burns & Associates’ figures suggested there was a great deal of variability in SIS scores, even though the needs of particular individuals usually can be expected to remain fairly constant over time.

For example, about 40 percent of those who had been assessed twice over a three-year period, or 726 of 1,798 individuals, had a change in funding levels the second time around, according to the consultants. In a smaller sample of 599 individuals, Burns & Associates said about 54 percent of funding authorizations decreased and the remainder increased.

Nygren, who saw the memo, said the changes have to do with the funding algorithm created by the state, not the SIS itself. A small change in SIS scores could result in a change in funding, depending on how the formula is constructed, she said. BHDDH has not responded to requests for the formula.

The funding formula
The extent to which re-assessments generated changes in funding authorizations, whether up or down, raised eyebrows when they came to the attention of state developmental disability officials in the summer of 2016.

At the time, the state had just promulgated a new policy declaring that the SIS would be administered solely on the basis of an individual’s need for support, in response to a federal court order that had been issued to enforce the consent decree.

Meanwhile, Jane Gallivan, an experienced administrator of developmental disability services, had just been hired as a consultant and interim director of Developmental Disabilities.

Gallivan later recommended the state switch to an updated version of the SIS, which she said she believed would be more accurate in capturing clients’ needs, particularly for those requiring behavioral and medical supports. Burns & Associates also was re-hired to re-tool the funding formula.

The conversion to the so-called SIS-A included the retraining of all the interviewers; it was launched in November of 2016, in the hope that the number of appeals – and supplemental payments – would come down.

Initial reports on the results of the SIS-A indicate that overall, they result in higher funding authorizations, according to developmental disability officials.

In the meantime, the current BHDDH budget allows for $18.5 million for supplemental payments, but in the first three quarters of the current fiscal year spending, the department went $3 million over that authorization, according to a recent House fiscal presentation. In turn, Raimondo is seeking some $22 million in supplemental payments in her budget for the fiscal year beginning July 1.

Legislators raise questions
Taking in these numbers on overruns in the supplemental payments at a recent Senate Finance Committee hearing, Sen. Louis DiPalma told BHDDH officials to “look at the equation” that assigns funding authorizations to adults with developmental disabilities.

DiPalma and Rep. Teresa A. Tanzi have sponsored companion legislation that would make developmental disability caseload part of the semi-annual caseload estimating conference, used by both the executive and legislative branches of government to gauge expenses for Medicaid and public assistance.

DiPalma also has sponsored a separate bill that would require the SIS to be administered by an independent third party, in order to avoid even the appearance of a conflict of interest.

AAIDD has recommended that states take steps to ensure “conflict-free” administration of the SIS, a point noted by the Department of Justice in its 2014 findings.

Court Monitor Has A Say
The independent court monitor’s recommendation in the implementation of the consent decree would go a step further and uncouple the SIS from the funding mechanism altogether.

The monitor’s reports to the U.S. District Court say the SIS should be used for “person-centered planning,” a bedrock principle of the consent decree, which puts the focus on the needs and preferences of individuals, rather than trying to fit their services into a pre-determined menu of choices, as is now the case.

The monitor, Charles Moseley has said the SIS should be used as a guide for developing an individualized program of services, and then funding should be applied to deliver those services. Currently, the funding defines the scope of the services.

Moseley has put the state on a quarterly schedule of progress reports toward implementing “person-centered planning.” Such changes have as-yet undefined budget implications for the state in the future.

Budget implications
Tom Kane, CEO of AccessPoint RI, a provider, explained to a subcommittee of the House Finance Committee in a recent hearing that it would be inherently more expensive to provide services in the community than it has been historically to have one person working with 10 clients in a room in a sheltered workshop or day program.

There is now only slightly more in state funding in the private developmental disability system than there was in 2010, Kane said. [The General Assembly has approved $218.3 million in reimbursements to private providers for the current budget cycle, or $10.2 million more than was spent in the fiscal year that ended June 30, 2010, according to state budget figures.]

“There are more people in the system,” Kane said. “The requirements of the consent decree are far more extensive than the kind of supports we were providing.”

Kane said that he’s “definitely in favor” of Raimondo’s budget proposal, which would add $10 million to the system over the next 15 months, but he believes the available funding is only half of what is needed to stabilize private provider agencies and ensuring their clients get the “services they deserve and require.”

Editor’s Note: This story first posted on April 26 in Developmental Disabiloity News. It is reprinted in ConvergenceRI with permission of Gina Macris.

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