CDCAN
DISABILITY
RIGHTS NEWS REPORT
California Disability Community
Action Network
Advocacy
Without Borders: We Are One Community
News Impacting People
With Disabilities, Mental Health Needs, Seniors &
Others
Goes out to over 45,000
people, organizations, policy makers across California
Report #064-2008 -
April 10, 2008 - Thursday morning
California Budget Crisis
* Regional Center Cost Containment Impact
Study
* Report to Dept of Developmental Services
* Study Shows "Rapid
Decline" In Spending Growth
SACRAMENTO (CDCAN) - A study that examined the trends and
impact of "cost containment" measures put in place to control and
reduce spending for regional center funded community-based services from 2002
through June 30, 2006 found that spending per person served have been
"essentially flat" since those measure were put in place in the
2003-2004 State Budget year.
The study, referred to as the "Acumen Report"
found while growth in spending dramatically increased from 1996 to 2001, that
growth declined rapidly since the 2003-2004 State Budget year when most of the
cost containment measures were fully implemented.
This report is different from the Department of
Developmental Services authored report released also on Friday, April 4th,
titled "Controlling Regional Center Costs". The report
was talked about in previous CDCAN Townhall Telemeetings by department
officials - with many persons participating on the townhall urging release of
the report.
A copy of both reports can be viewed or
downloaded from the CDCAN website at www.cdcan.us
under "State Budget updates". See CDCAN website also to listen
to audio recordings of the CDCAN townhalls.
Significant Rise in Spending 1993 to 2006
The study found that between the 1993-1994 and 2005-2006
State budget years, the Department of Developmental Services saw spending
on people with developmental disabilities living in integrated
community settings increase significantly.
Adjusting for inflation, expenditures coming from
actual data of the budget that funds community-based services
through the regional centers (referred to as "purchase of services"
or "POS" budget) rose from $744 million in 1993-1994 State
budget year to $2.2 billion in the 2005-2006 State budget year. That
figure excludes administrative costs for both the Department of Developmental
Services and the 21 regional centers)
The report found that although caseloads (numbers of
children and adults with developmental disabilities eligible for regional
center funded services) were growing rapidly during the 1993-2006 period, the
growth in spending matched or exceeded caseload growth in every year
except the 2004-2005 State budget year.
Department Oversees 21 Non-profit Regional Centers
The 21 non-profit regional centers are contracted by the
Department of Developmental Services and coordinate and oversee
community-based funded services and supports to over 230,000 children and
adults with developmental disabilities. The services and supports are
provided by various community-based organizations and individuals including providing
help and support for someone to live in their own home or to live more
independently, day programs, various work related programs, respite for
families, and interventions.
The Department of Developmental Services contracted with a
consulting company, Acumen LLC in September 2006 to examine the cost
containment measures implemented beginning in the 2002-2003 State Budget
year and if those measures produced the results state policymakers believed
it would.
Impact of Report
* It is not certain what impact this report will have on
policymakers and advocates dealing with the State budget crisis and
the enormous shortfall that still exists that some analysts say is likely to
grow higher than the current estimate of $8 to $9 billion.
* Policymakers are looking at ways to bridge the enormous
shortfall that is on-going, which means they are looking for permanent ways to
cut spending in addition to temporary measures. This study - combined
with a report from the Department of Developmental Services issued last week
containing a list of options to control regional center spending - could be
used to help guide policymakers and others in ways to look at other budget
cutting measures. Neither report contains actual proposals to the
Legislature.
* The report covers issues that the Legislature and
Governor already took action on. The Governor proposed in January and
the Legislature approved in February as part of a package of emergency budget
bills, making all the cost containment measures analyzed in the study,
permanent, in addition to a couple of other new measures. In addition
the Governor proposed in January and the Legislature also approved in
February, an expansion of the family cost participation program - sometimes
referred to as the family co-payment or share of cost program.
* It is not certain how this report will impact current or
future legislative efforts to address the crisis in people with autism
spectrum disorders and their families, or efforts to expand employment,
housing and other opportunities for people with developmental disabilities
(including autism).
* It is not certain how this report - and also the report
about controlling regional center costs - will impact budget issues related to
other critical services, including In-Home Supportive Services, SSI/SSP, Medi-Cal,
mental health services.
and special education. Policymakers could look for
ideas in this study and the "Controlling Regional Center Costs"
report on how to address budget issues in those programs. In addition,
tens of thousands of people with developmental disabilities use IHSS and other
programs outside the Department of Developmental Services.
Next Steps
* Two budget subcommittee hearings are scheduled that could
cover some of these issues - April 17th by the Senate Budget Subcommittee #3
on Health and Human Services and April 23rd by the Assembly Budget
Subcommittee on Health and Human Services. See CDCAN website for details
on those hearings.
* A CDCAN Townhall Telemeeting is scheduled for April 30
from 1 to 2:45 PM with Director Terri Delgadillo and other department
officials and is open to anyone. See CDCAN website for more information.
What Report Covers and What Data Was Used
This particular study only used financial data to examine
the impact and results and did not include other information from community
based providers and others impacted.
The report uses financial data from 1993-94 through 2005-06
to make that assessment.
Regulatory, policy and operational changes
implemented after June 30, 2006 were not considered within the
scope of the report. The one time 3% provider rate increases in
July 2006, the increase in the minimum wage, the establishment of permanent
cost-containment measures approved in February 2008, and the elimination of
the sunset date of the Family Cost Participation Program and the expansion
of that program (also approved in February 2008) were not covered in the
report since it fell outside the period of time studied.
The report uses the Department of Developmental Services;
Purchase of Service (the budget that funds regional center community-based
services and supports) expenditure data from 1993-1994 to 2005-2006
State budget years, combined with information of people with developmental
disabilities from Department of Developmental Services reports and
files, including the "Client Master File" and "Client
Development Evaluation Report". The study says it used this
information to "better understand the trends" in Department of
Developmental Services spending over the time period covered.
The report in particular focused on the effects of cost
containment efforts by the State implemented primarily in the
2003-2004 State budget year in the following ways:
* Examined the trends in spending by service and
consumer characteristics over time.
* Examined consumer characteristics that will impact future
costs.
* Used forecasts of the use (utilization) of and per capita
expenditures on services under alternative scenarios to estimate the effects
of these cost containment efforts on total expenditures.
* These forecasts "simulate" the costs or
spending that would have occurred in the absence of the cost containment
measures (and assumes that the patterns of use of services by different
consumer groups followed the previous trends before cost containment was
implemented)
* The report believes that the difference between the
simulated costs if cost containment measures were not put in place and the
actual costs with cost containment in place can produce an estimate of the
impact.
The difference between expenditures under these
"counterfactuals" and the actual expenditures observed with the
imposition of cost containment provides an estimate of the impact of the cost
containment measures.
Report's Five Major Findings
The report came up with five findings:
1. RAPID INCREASES IN SPENDING 1996 TO 2001
Report found that rapid increases in per consumer
expenditures were concentrated in the period from the 1996-1997 to
2000-2001.State budget years.
During that time period, the Department of Developmental
Services instituted a number of rate increases and other changes in response
to several :"outside pressures" including:
* Response by the State to comply with two
lawsuits (Coffelt settlement in state court and the 1999 US Supreme Court
Olmstead decision), both which required expansion of efforts to move persons
with developmental disabilities out of the state operated and owned
developmental centers and into the community (and also place people who in
previous times would have automatically been placed in a state owned and
operated facility and instead "divert" or "deflect" them
into a community setting instead.
* Increase in funding to respond to issues raised as a
result of a federal audit of the Medicaid Home and Community Based
Services waiver that funds many community-based regional center services. That
audit was the subject of several newspaper articles that raised questions
about the quality of community-based services.
* Rate increases due to increases in the
state minimum wage.
2. PER CONSUMER SPENDING FLAT SINCE 2003-2004 BUDGET
YEAR
Report found that the spending per person (consumer or person
receiving services or supports through the regional centers) have been
"essentially flat in real terms" since the various cost
containment measures were first implemented in the 2003-2004 State Budget
year.
3. SHIFTING TO MORE EXPENSIVE RESIDENTIAL SERVICES
The report found that there was some evidence of people with
developmental disabilities shifting to more expensive residential service
types.
* Residential service use declined throughout the period as consumers moved
to Supported Living Service.
* In particular, the use of alternative residential model (ARM)
Community Care Facilities (CCFs) has declined with residents moving to
Supported Living Services. At the same time, there has been increased use of
higher service level community care facilities (both across levels
and within level 4) and specialized residential settings.
4. SIGNIFICANT COSTS AVOIDED DUE TO RATE FREEZES & OTHER MEASURES
The report projected or simulated what spending on services that
were targeted with rate freezes and other cost containment measures.
* The simulation or projection showed that "significant costs"
were "avoided" through the rate freezes and other cost containment
measures, although in some cases the report found that this was also
due to utilization (use of services, which includes a reduced number of
people with developmental disabilities using a service)
* The report found that rate freezes did not change the rate of decline in
residential services, but the Family Cost Participation Program appears to
have reduced the use of respite care for families of children with
developmental disabilities.
* Utilization growth also slowed for day programs.
5. NARROWING OF ELIGIBILITY ONGOING IMPACT OF FEW CASES
Report found that a major change implemented in 2003 that narrowed
eligibility for regional center funded services, which the report referred
to as "eligibility standardization", probably resulted in $26
million that was reduced (or saved) from the Department of Developmental
Services budget, with a ongoing or cumulative impact of few new cases each
year.
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This report -
and the CDCAN townhall telemeetings, and other events and projects
are for all of them and for promoting advocacy without borders
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To respond to this report reply to: Marty Omoto at martyomoto@rcip.com
CDCAN website: www.cdcan.us
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MANY MANY THANKS to Alta California Regional Center, FEAT (Families
for Early Autism Treatment), Friends of Children with Special Needs, Life
Steps, Easter Seals California, Parents Helping Parents, UCP of Los
Angeles and Ventura Counties, Work Training, Foothill Autism
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Centers, several regional centers, People First chapters, IHSS
workers, other self advocacy and family support groups,
developmental center families, adoption assistance program families
and children, and others across California