Comments on FY 2010-11 State Budget Proposals Affecting People with Developmental Disabilities 2/3/2011*
Disability Rights California supports the Administration’s efforts to extend the current sales tax and vehicle license fee as a portion of the budget solution and commends the Department of Developmental Services (DDS) for its efforts to increase federal Medicaid matching funds during the past two years. Increased federal reimbursement resulted in a savings to the DD System of $81.4 million in general funds in 2009-10 and $84.6 million in general funds in 2010-11 and each year thereafter. While Disability Rights California understands the difficult financial problems that the state continues to face, we remain concerned that ongoing and additional reductions in the developmental disabilities system will adversely impact an already fragile community-based system. It will jeopardize the health and safety of consumers, and increase the likelihood that additional consumers will be institutionalized; at increased cost to the state. Given the serious reductions in the developmental disabilities system and other safety net programs, additional revenue solutions are also needed.
The Proposed Reduction is Too Deep and Fails to Ensure Consumer Health and Safety
The Department of Developmental Services (DDS) budget has seen deep and significant reductions including a $359 million general fund reduction in 2009-10 and 2010-11 combined. The 2011-12 proposed reduction of $750 million in general funds to the Developmental Disabilities (DD) budget is extreme and will cause irreparable harm to consumer health and safety. The proposed reduction will result in the elimination of needed services, reduce the quality of services, and diminish consumer choice. For example, a POS standard which eliminates one day a week of all day programs would save $100 million but would mean that some of California’s most vulnerable citizens have no support or supervision for that day. Cutting services at this level is the equivalent of making nearly a 25% additional reduction to every regional center and every non profit agency providing services to individuals with developmental disabilities.
The Proposed Budget Would Create a Dual System of Care That Favors Institutionalization Violating State and Federal Law
All of the proposed reductions come from the community system and as a result there will be a dual system of care. Although significantly reducing community expenditures, the administration’s budget proposes to increase developmental expenditures by $10 million. This not only violates the Lanterman Act and ADA requirements of ensuring placement in the least restrictive environment, but will cost the state more money as individuals are forced to move to institutions in order to receive the services they need, at a cost of more than $300,000 per year. In 2009-10, over 13% of the DD budget was spent on state developmental centers while DC’s served just over 2000 individuals--less than 1% of Californians with developmental disabilities served by the regional center system*. Instead, the state must continue to develop alternatives to institutions, such as Adult Residential Facilities for Persons with Special Health Care Needs (ARSFPSHN), also known as “962 homes” which have been found to be cost-effective and to have contributed in meaningful ways to consumers’ health, quality of life, level of functioning, and overall happiness.
There Are Better Ways to Close the Budget Gap.
We recommend the following steps to ensure the availability of community services necessary to protect the inclusion, health and welfare of Californians with developmental disabilities. We welcome the opportunity to discuss these proposals further with the department and the legislature; we can provide more detail upon request.
- Implement a State Plan Amendment (SPA) to cover services provided to individuals in the Early Start program that will increase the services eligible for a federal match for Medicaid eligible consumers. The original 1915i SPA did not include children who receive their services through the early intervention program. We believe the SPA can be amended to include them.
- Require that private insurance companies cover essential durable medical equipment and pay for other medically necessary therapies and not shift the cost to regional centers.
- Continue to identify and explore methods for increasing federal financial participation such as a provider fee for some regional centers including independent living, supported living, and respite.
- Implement the closure plan for Lanterman Developmental Center, cease any new capital outlay for the DC’s and develop a plan for closing two other Developmental Centers as well as the one remaining small community institutions.
- Expand all options for specialized health care service homes for people with developmental disabilities statewide (962 homes), and develop new Medicaid Waiver eligible supported-living options for people with behavioral challenges.
- Consolidate state licensing/quality assurance functions for the developmental disabilities system in DDS to conserve resources and improve services. We recommend the elimination of duplicative Department of Social Services and Department of Public Health (DPH) licensing of living arrangements for people with developmental disabilities and the lodging of this function (including the authority to take corrective actions against providers when necessary) solely in DDS. This is already done successfully for supported living services and family home agencies.
- Resolve concerns with the waivers administered through In-Home Operations. Children with medical needs often are able to live at home with their families with the support of home nursing. Upon turning 21 and aging out of EPSDT, individuals who meet nursing facility level B level of care will see their nursing hours cut almost in half and those services paid by the regional center.
- Increase self-directed service options while reducing expenditures in a self-directed program overall by 10%.
Disability Rights California Comments on Specific Proposals in the DDS Budget
Disability Rights California Supports DDS’ Proposal to Increase Federal Funds. This proposal would focus on enhancing revenue by increasing federal funding through: (1) expanding the pending federal 1915(i) State Plan Amendment to include additional consumers and related expenditures consistent with federal health care reform; (2) maximizing use of federal “Money Follows the Person” funding for individuals placed out of institutions; and, (3) pursuing other enhanced federal funding opportunities. This proposal would, at a minimum, save $65 million General Fund in 2011-12. We also strongly encourage the Administration and DDS consider other possibilities for enhancing revenue as noted above.
Disability Rights California Opposes the Implementation Statewide Service Standards: This proposal would establish statewide standards and parameters for services available through the regional centers. The proposal is vague and needs to be further developed in order to provide specific comments. Moreover, it is simply not possible to develop standards that will achieve the anticipated level of savings. We also oppose the implementation of any standards which are not consistent with the Lanterman Act’s values of individual choice, integration into the mainstream of community life, and the requirements of the Olmstead decision, as well as the Americans with Disabilities Act (ADA).
Disability Rights California Opposes the Continued Temporary Regional Center and Service Provider Payment Reductions. The 2010 Budget Act contained a 4.25 percent reduction to regional center and service provider payments. Scheduled to sunset on June 30, 2011, the budget proposes to extend it for another year resulting in state savings of $91.5 million in 2011-12. We are concerned that the continuation of the rate reduction, combined with the rate freezes that have been in effect since 2003 and the underfunding of existing community services, makes it difficult to hire and retain staff with the ability to provide quality care. This results in services that are not provided in the most integrated settings as required by both the Lanterman Act and the federal Americans with Disabilities Act and Olmstead decision. Ultimately, the continuation of some of these budget actions have and will strain an already fragile community based system.
Disability Rights California Supports the Continuation of the Proposition 10 Funding. The regional center budget includes $50 million in reimbursement funding in 2010 -11 from the California Children and Families Commission (Proposition 10) to provide services to consumers from birth to age five in the Prevention Program. It is our understanding that this funding has already been approved by the Commission. We support the continuation of $50 million in reimbursement funding in 2010 -11, but recommend that DDS monitor the implementation of the Prevention Program to ensure proper referral and utilization of the program as there have been community concerns that there is confusion among professionals about how to refer individuals to that program.
Disability Rights California Supports DDS’ Proposal to Ensure Accountability and Transparency. This proposal would set parameters on the use of state funds for administrative expenditures of regional centers and service providers. It would increase auditing requirements, and increase disclosure requirements. By way of example, this may be achieved by capping administrative costs for regional centers and providers at 15%.
Disability Rights California Supports Additional Funds to Absorb the Impacts from Reductions in other Departments. The budget contains an increase of $1.5 million in 2010 -11, and an increase of $54 million in 2011-12 as a result of establishing mandatory co-payments for all health related visits, limiting physician and clinic visits, eliminating the optional Adult Day Health Care benefit, and reducing the Supplemental Security Income/State Supplementary Payment grants for individuals to the federal minimum. While we strongly oppose these other departmental reductions because of the overall impact to the larger disability community and health and human services safety net, we support these proposals to offset the reductions in other departments to the extent such reductions are made. Further, we recommend additional funding to offset any potential changes to the IHSS program.
Disability Rights California Believes Any Capital Outlay Expenditures on Developmental Centers Must Be Balanced By Reductions in Overall Developmental Center expenditures. The capital outlay budget includes $2.0 million General Fund to design and install automatic fire sprinklers in 13 buildings that house Nursing Facility and General Acute Care consumers at the Fairview, Porterville and Sonoma Developmental Centers. The budget proposes the reappropriation of funding for an addressable fire alarm system, already approved by the Legislature, in consumer utilized buildings at Fairview Developmental Center. Finally, the budget anticipates construction phase for a new piping system, already approved by the Legislature, to supply additional oxygen, medical air and suction, and a new oxygen storage tank at the Johnson/Ordahl building at Sonoma Developmental Center.
We appreciate that it is necessary to preserve consumer’s health and safety. However, the developmental centers (DCs) are slated to receive a $10.6 million General Fund increase in addition to these capital expenditures. We can not decimate the community system while both increasing the DC budget and approving capitol expenditures.
* For further information contact: Evelyn Abouhassan (916-497-0331).