Continuing Resolution Testimony Presented by Chris Santaniello Concord, NH August 24, 2015
Posted: August 24, 2015
Senator Forrester and members of the Health and Human Services Continuing Resolution Work Group, thank you for inviting me here today. I would like to share with you information about several issues that have emerged as topics of discussion:
Caseload Numbers and Wait List: There have been recent references made to a reduction in area agency enrollments.
- I am sharing with you the attached spreadsheet that shows the numbers served on each Medicaid waiver for the last 3 fiscal years.
- As you can see, our numbers have not decreased. They show growth each year. There is no data that the Area Agencies (AAs) have or seen that suggest that FY 16 will be any different.
- It is my understanding from the Bureau that there were 180 people on the Waiting List as of July 1.
- While the Waiting List (WL) money is contained in the budget approved by the Legislature for FY 16, the AAs have been given money only for the first quarter of this fiscal year; as a result we have not been in a position to allocate WL moneys beyond the first quarter.
- As you may recall, in accordance with RSA 171-A those students transitioning from high school are supposed to be provided with funds 90 day prior to their leaving school, and those adults newly found eligible to the system are supposed to have funding allocated to them within 90 days of a service plan being created. Under the current situation the AAs are not able to fully comply with those statutory expectations.
Lapse: As you know, lapsing of funds occurs when the appropriated funds are not fully utilized. There are many reasons for lapse. Some are within an agency’s control and others are not. Some lapse can be annualized, some cannot. For example:
- Missed Services: Lapse funds can occur when individuals are sick and cannot attend day programming or they may be hospitalized and cannot receive their residential and day services. Or, their visits or vacations with their families may last longer than planned and as a result they may miss services. All of these are beyond an agency’s control. Typically these occurrences do not happen consistently or predictably; and in those instances in which they were to happen regularly, we look to modify the services and the related funding allocation.
- Inclement Weather: There are times in which certain services are suspended due to inclement weather and safety considerations. For example, if I have to call a “snow day” for my region’s day services I lose about $20,000 per day. (And mine is a relatively small region.) This is lapse money, and cannot be projected precisely, controlled or annualized for each year.
- Cost of Care: Under the Medicaid regulations, when a person has more income than an identified amount called Standard of Need, the AA must subtract that amount from its Medicaid billing and recover it from the individual. As a result these Cost of Care deductions lead to lapse amounts. As long as the same person has the same cost of care, year to year, this amount of lapse can be annualized. In other cases where the amounts vary from to year they can lead to lapse complications.
- Consumer Directed Services/PDMS Funding: As more families have chosen to receive their services under this model a new and growing source of unused Medicaid has developed. As families experience complications in recruiting and retaining staff due to the modest wage levels our system offers, a portion of their budgets becomes underspent, creating lapse funds for the system. Since these types of problems vary from year to year, the resulting savings cannot be annualized. Moreover, once the family hires a staff person, then the full budget is needed for the Medicaid billing.
- Loss of Medicaid Eligibility: Sometimes individuals lose their Medicaid due to changes in their income level but do not inform the AA, which continues to provide its services. This gap in eligibility can result in the AA not recovering the expected Medicaid revenue and ultimately lapse in funding.
- Waiting List Issue #1: When services are being created for a new client for the first time with WL funds, delays in start of services can occur due to a variety of reasons. Problems can occur in recruitment of staff or providers, finding affordable housing options, delays in making a residence accessible, or discovery of safety issues that were not known before and need to be addressed, etc. All of these challenges can create one-time unspent moneys that cannot be necessarily predicted, controlled or annualized.
- Waiting List Issue #2: In the past the Waiting List funds for the second year of the biennium were being allocated to the AAs as partial year funds. Under BDS’s new process, the second year Waiting List funds are now being considered annualized, which means that if my agency has someone who is not turning 21 until June, it is given a full year’s funds but able to use only a very small portion of it, while the rest falls out as lapse.
Moving Forward on Lapse:
- As you can see from the above examples lapse happens for a variety of unique and complicated reasons. In spite of the fact that the many of the factors creating and impacting the lapse amounts are not under the control of the area agencies, we are willing to work with the Deportment to better understand, manage, and minimize the lapse funds.
- The AAs have spent a considerable amount of time in studying their lapse amount for FY 15. The number that the area agencies have calculated as lapse for the total system is $16 M, which is significantly lower than the one identified by DHHS. This difference may be due to the fact that unused WL funds had been transferred from FY 14 to FY 15 as one-time savings. The AAs did not have access to these funds during FY 15 and were not in a position to use them.
- Also, we would like to point out that lapses in the AA system funding had happened before the last biennium. In the past, those lapse amounts were welcomed by the Bureau as helping the Department with its Back Of the Budget reduction obligations. Unfortunately over this past year there has been a different interpretation of the lapse amounts. This is the first year the lapse funds have been identified to the area agencies as being problematic and available for annualized budget reductions.
- In closing, we want to reiterate that the AAs have always tried to make full use of the appropriated funds to provide the necessary services to individuals and their families. In instances when the same person lapses the same amount every year, the money can be and have been decreased from that person’s allocation. However, in instances when the lapse is not due to the same person not using the same amount from year to year, the saving could not and should not be seen as permanent. We are concerned that treating such funds as annualized amounts and reducing them from the funding for the system is going to lead to regrettable reductions in individual budgets and services.
Senator Forrester, thank you for allowing me to provide you with information regarding some of the budget related issues. I also want to thank you and the rest of the Legislators for restoring the funds to the developmental services system. On behalf of all of the AAs I ask for your continuing support in moving forward with the FY 16 and 17 budget. Thank you.
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