OFFICE OF MENTAL RETARDATION AND DEVELOPMENTAL DISABILITIES
EMERGENCY RULE MAKING
I.D No. MRD-03-09-00004-E
Filing No. 1134
Filing Date. Sept. 25, 2009
Effective Date. Sept. 26, 2009
Trend Factors for 2009
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Amendment of sections 81.10, 635-10.5, 671.7, 680.12, 681.14 and 690.7 of Title 14 NYCRR.
Statutory authority:
Mental Hygiene Law, sections 13.09(b) and 43.02
Finding of necessity for emergency rule:
Preservation of general welfare.
Specific reasons underlying the finding of necessity:
Emergency regulations are necessary to continue to reimburse providers and maintain the stability of the current service system, which ensures that individuals have access to necessary supports and services. The rapidly changing and deteriorating economy prevented the State from being able to determine an appropriate trend factor for the above facilities and services before 2009. This did not allow for proposal and promulgation of these amendments within the regular SAPA procedural time frames. The amendments continue the various reimbursement methodologies used to establish rates/fees for the above facilities and services, thereby maintaining current funding levels for these services and the stability of OMRDD’s service system, which in turn ensures that New Yorkers with developmental disabilities continue to have access to necessary supports and services.
Subject:
Trend Factors for 2009.
Purpose:
To continue the methodologies used to calculate rates/fees for the rate/fee periods beginning with 1/1/09.
Text of emergency rule:
Paragraph 81.10(b)(4) - Add new subparagraph (v):
(v) 0.00 percent for the 2009 fee period.
Paragraph 635-10.5(i)(1) - Add new subparagraph (xxvii):
(xxvii) 0.00 percent to trend 2008-2009 costs to 2009-2010.
Note: Rest of paragraph is renumbered accordingly.
Paragraph 635-10.5(i)(2) - Add new subparagraph (xxvii):
(xxvii) 0.00 percent to trend calendar 2008 costs to calendar year 2009.
Note: Rest of paragraph is renumbered accordingly.
Clause 671.7(a)(1)(vi)(a) - Add new subclause (17):
(17) For calendar year 2009:
NYC and Nassau, Rockland, Suffolk, and Westchester Counties
$ 31.97 per day
Rest of State
$ 30.97 per day
Clause 671.7(a)(1)(xvi)(a) - Add new subclause (15):
(15) 0.00 percent from January 1, 2009 through December 31, 2009.
Clause 671.7(a)(1)(xvi)(b) - Add new subclause (15):
(15) 0.00 percent from July 1, 2009 through June 30, 2010.
Paragraph 680.12(d)(3) - Add new subparagraph (xxii):
(xxii) 0.00 percent for 2009.
Add new subclause 681.14(c)(3)(ii)(b)(9):
(9) If a facility is subject to an expanded desk audit per subclause (2) of this clause, but the desk audit has not been completed by January 1, 2009 or July 1, 2009, OMRDD shall continue the rate established according to the first sentence of subclause (3) of this clause and, if applicable, further trended to 2009 or 2009-2010 dollars until OMRDD completes the expanded desk audit. Upon OMRDD’s completion of the expanded desk audit, for the base period and subsequent periods beginning January 1, 2003 or July 1, 2003, the methodology described in this section will apply.
Subparagraphs 681.14(h)(1)(xviii)-(xix) are amended and a new subparagraph (xx) is added as follows:
(xviii) 2.97 percent for 2006-2007 to 2007-2008; [and]
(xix) 3.52 percent for 2007-2008 to 2008-2009 [.] ; and
(xx) 0.00 percent for 2008-2009 to 2009-2010.
Subparagraphs 681.14(h)(2)(xviii)-(xix) are amended and a new subparagraph (xx) is added as follows:
(xviii) From February 1, 2007 to December 31, 2007, facilities will be reimbursed operating costs that result in a full annual trend factor of 2.97 percent for the rate period. On January 1, 2008, the trend factor for the previous rate period shall be deemed to be the 2.97 percent full annual trend; [and]
(xix) From February 1, 2008 to December 31, 2008, facilities will be reimbursed operating costs that result in a full annual trend factor of 3.52 percent for the 2008 rate period. On January 1, 2009, the trend factor for the previous rate period shall be deemed to be the 3.52 percent full annual trend [.] ; and
(xx) 0.00 percent for 2008 to 2009.
Subparagraphs 681.14(h)(3)(xxvi)-(xvii) are amended and subparagraph (xxviii) is added as follows:
(xxvi) 2.97 percent for 2006-2007 to 2007-2008; [and]
(xxvii) 3.52 percent for 2007-2008 to 2008-2009 [.]; and
(xxviii) 0.00 percent for 2008-2009 to 2009-2010.
Subparagraphs 681.14(h)(4)(xxvi)-(xxvii) are amended and subparagraph (xxviii) is added as follows:
(xxvi) From February 1, 2007 to December 31, 2007, facilities will be reimbursed operating costs that result in a full annual trend factor of 2.97 percent for the rate period. On January 1, 2008, the trend factor for the previous rate period shall be deemed to be the 2.97 percent full annual trend; [and]
(xxvii) From February 1, 2008 to December 31, 2008, facilities will be reimbursed operating costs that result in a full annual trend factor of 3.52 percent for the 2008 rate period. On January 1, 2009, the trend factor for the previous rate period shall be deemed to be the 3.52 percent full annual trend [.] ; and
(xxviii) 0.00 percent for 2008 to 2009.
Subparagraph 690.7(d)(6)(iii) is amended by adding new clause (g) to read as follows:
(g) From April 1, 2009 to March 31, 2010 the trend factor shall be 0.00 percent for all facilities.
This notice is intended
to serve only as a notice of emergency adoption. This agency intends to adopt the provisions of this emergency rule as a permanent rule, having previously submitted to the Department of State a notice of proposed rule making, I.D. No. MRD-03-09-00004-EP, Issue of January 21, 2009. The emergency rule will expire November 23, 2009.
Text of rule and any required statements and analyses may be obtained from:
Barbara Brundage, Director, OMRDD Regulatory Affairs Unit, Office of Counsel, 44 Holland Ave., Albany, NY 12229, (518) 474-1830, email: barbara.brundage@omr.state.ny.us
Additional matter required by statute:
Pursuant to the requirements of the State Environmental Quality Review Act, OMRDD, as lead agency, has determined that the action described herein will have no effect on the environment, and an E.I.S is not needed.
Regulatory Impact Statement
1. Statutory authority:
a. OMRDD's authority to adopt rules and regulations necessary and proper to implement any matter under its jurisdiction as stated in the New York State Mental Hygiene Law Section 13.09(b).
b. OMRDD's responsibility, as stated in section 43.02 of the Mental Hygiene Law, for setting Medicaid rates for services in facilities licensed by OMRDD.
2. Legislative objectives: These amendments further the legislative objectives embodied in sections 13.09(b) and 43.02 of the Mental Hygiene Law. The promulgation of these amendments concerns methodologies for rates or fees for voluntary agency providers of the following services:
a. Programs authorized by OMRDD to operate as integrated residential communities (amendments to section 81.10).
b. Individualized Residential Alternative (IRA) facilities and Home and Community-based (HCBS) Waiver services (amendments to section 635-10.5).
c. Home and Community-based (HCBS) Waiver Community Residential Habilitation Services (amendments to section 671.7).
d. Specialty Hospitals (amendments to section 680.12).
e. Intermediate Care Facilities for Persons with Developmental Disabilities (ICF/DD) (amendments to section 681.14).
f. Day treatment facilities serving people with developmental disabilities (amendments to section 690.7).
3. Needs and benefits: OMRDD has historically increased operating revenues to providers on an annual basis through the implementation of trend factors. Their purpose has been to ensure that provider reimbursement stays abreast of inflation and to provide resources that enable providers to attract and appropriately compensate staff. For the last nine years, relatively robust economies have dictated annual trend factors averaging 4.84 percent. Once applied, the trend factors accumulated and compounded.
The current economic landscape is vastly different from the ones that gave impetus to the previous trend factors. The economy is in a recession and the State is facing a budget deficit of a size not seen since the Great Depression. Even with the difficult economic situation, OMRDD is expanding its health care adjustment initiative in 2009 by giving eligible providers funding increases for health care premiums and employee health care related benefits.
Economic realities, coupled with the fact that OMRDD providers are receiving additional funding in the form of health care adjustments, all played a factor in the Governor and Legislature's decision not to include any funding in the budget for a trend factor in this State fiscal year. All providers, including OMRDD, are doing without a trend factor for 2009.
The amendments do maintain funding levels for the services by continuing the current reimbursement methodologies.
4. Costs:
a. Costs to the Agency and to the State and its local governments. Since the amendments establish trend factors of zero percent, there are no costs associated with the emergency amendments. They only continue the various reimbursement methodologies used to establish rates/fees for the referenced developmental disabilities facilities and services, thereby maintaining current funding levels.
There are no additional costs to local governments resulting from the emergency amendments.
The amendments to section 671.7 also update the SSI per diem allowances consistent with levels determined by the Federal Social Security Administration. There are no additional costs attributable to this conforming amendment, either to the State or to local governments.
b. Costs to private regulated parties: There are no initial capital investment costs nor initial non-capital expenses. There are no additional costs associated with implementation and continued compliance with the rule. The emergency amendments are necessary to continue funding of the affected facilities at levels of reimbursement that are currently in effect.
5. Local government mandates: There are no new requirements imposed by the rule on any county, city, town, village; or school, fire, or other special district.
6. Paperwork: No additional paperwork will be required by the amendments.
7. Duplication: The amendments do not duplicate any existing State or Federal requirements that are applicable to the above cited facilities or services for persons with developmental disabilities.
8. Alternatives: No alternatives to these trend factors were considered. The zero trend factor regulations respond to the current economic climate and present funding increases for OMRDD providers.
9. Federal standards: The amendments do not exceed any minimum standards of the federal government for the same or similar subject areas.
10. Compliance schedule: The emergency rule is effective September 26, 2009. OMRDD has previously filed the rule as a Notice of Emergency Adoption and Proposed Rule Making that was published in the State Register January 21, 2009. This represents the third emergency readoption of these amendments. They do not impose any new requirements with which regulated parties are expected to comply.
Regulatory Flexibility Analysis
1. Effect on small business: These regulatory amendments will apply to voluntary not-for-profit corporations that operate the following facilities and/or provide the following services for persons with developmental disabilities in New York State:
o Programs certified by OMRDD as integrated residential communities (amendments to section 81.10). As of December 2008, there were only two such programs authorized by OMRDD to operate as integrated residential communities. They serve approximately 105 persons.
o Individualized Residential Alternative (IRA) facilities, and Home and Community-based (HCBS) Waiver services (amendments to section 635-10.5). New York State currently funds IRA facilities and all authorized HCBS Waiver residential habilitation, day habilitation, supported employment, respite and prevocational services for the approximately 63,920 persons receiving such services as of December 2008.
o Home and Community-based (HCBS) Waiver Community Residential Habilitation Services (amendments to section 671.7). As of December 2008, OMRDD funds voluntary operated community residence facilities which serve approximately 400 persons.
o Intermediate Care Facilities for Persons with Developmental Disabilities (ICF/DD), (amendments to section 681.14). As of December 2008, there were approximately 5,530 people served in ICF/DD facilities in New York State.
o Day Treatment Facilities for Persons with Developmental Disabilities, (amendments to section 690.7). As of December 2008, there were approximately 2,260 people served in Day Treatment facilities in New York State.
While most of the above services are provided by voluntary agencies which employ more than 100 people overall, many of the facilities operated by these agencies at discrete sites (e.g. IRAs or Day Habilitation programs) employ fewer than 100 employees at each site, and each site (if viewed independently) would therefore be classified as a small business. Some smaller agencies which employ fewer than 100 employees overall would themselves be classified as small businesses.
There is only one Specialty Hospital (amendments to section 680.12) which serves approximately 50 people, certified to operate in New York State. It employs more than 100 persons and would therefore not be considered a small business as contemplated under the State Administrative Procedure Act (SAPA).
The emergency amendments have been reviewed by OMRDD in light of their impact on these small businesses and on local governments. OMRDD has determined that these amendments will continue current levels of funding for small business providers of developmental disabilities services.
Since the amendments do not increase funding of the referenced services or programs, they will not result in any costs to local governments.
2. Compliance requirements: There are no additional compliance requirements for small businesses or local governments resulting from the implementation of these amendments.
3. Professional services: In accordance with existing practice, providers are required to submit annual cost reports by certified accountants. The amendments do not alter this requirement. Therefore, no additional professional services are required as a result of most of these amendments. The amendments will have no effect on the professional service needs of local governments.
4. Compliance costs: There are no additional compliance costs to small business regulated parties or local governments associated with the implementation of, and continued compliance with, these amendments. OMRDD has considered the desirability of a small business regulation guide to assist provider agencies with this rule, as provided for by new section 102-a of the State Administrative Procedure Act. However, since the emergency rule requires no compliance effort on the part of the regulated service providers (most of which could be considered as small businesses under SAPA), OMRDD does not, at this time, contemplate the development of any such small business regulation guide.
5. Economic and technological feasibility: The emergency amendments are concerned with rate/fee setting in the affected facilities or services. The amendments do not impose on regulated parties the use of any technological processes.
6. Minimizing adverse impact: The purpose of these emergency amendments is to continue to reimburse providers of the referenced services at current levels. The trend factor provisions do not increase or decrease funding of small business providers of services.
These amendments do not decrease funding for regulated parties and have no economic impact on local governments. Therefore, regulatory approaches for minimizing adverse economic impact suggested in section 202-b(1) of the State Administrative Procedure Act are not applicable.
7. Small business and local government participation: OMRDD has discussed the proposal for 0% trend factors with the provider associations. In addition, the proposal was a part of the 2009-10 Executive Budget which has been widely disseminated among local governments and the provider community.
Rural Area Flexibility Analysis
A Rural Area Flexibility Analysis for these amendments is not submitted because the amendments will not impose any adverse impact or significant reporting, record keeping or other compliance requirements on public or private entities in rural areas. The amendments are concerned with the reimbursement methodologies which OMRDD uses in determining the reimbursement of the affected developmental disabilities services or facilities. The amendments will have no adverse fiscal impact on providers as a result of the location of their operations (rural/urban), because the overall reimbursement methodologies are primarily based upon reported budgets and costs of individual facilities, or of similar facilities operated by the provider or similar providers in the same area. Thus, the reimbursement methodologies have been developed to reflect variations in cost and reimbursement which could be attributable to urban/rural and other geographic and demographic factors.
Job Impact Statement
A Job Impact Statement for these amendments is not being submitted because it is apparent from the nature and purposes of the amendments that they will not have a substantial impact on jobs and/or employment opportunities. This finding is based on the fact that the amendments are concerned with the reimbursement methodologies which OMRDD uses in determining the appropriate reimbursement of the affected developmental disabilities services or facilities. The amendments continue to reimburse the various facilities or services at current levels of reimbursements for the rate/fee periods beginning January 1, 2009.
Assessment of Public Comment
Comments:
OMRDD conducted hearings on the trend factor regulations in Western New York, the Capital District and New York City. Over 100 individuals presented testimony in person at the hearings. Nearly 300 people attended the hearings (including those testifying). In addition, over 200 individuals sent written comments, and a petition was received with nearly 400 signatures.
Individuals who testified or sent comments are a representative cross section of those involved in the OMRDD system. They included: individuals receiving services, parents and family members of individuals receiving services, direct support professionals (DSPs) and other employees of not-for-profit providers, administrators of not-for-profit providers (including executive directors), members of Boards of Directors, representatives from the Self Advocacy Association of New York State and other advocacy organizations, representatives of unions of employees of not-for-profit providers, and representatives of provider associations.
Many individuals praised what they characterized as the unparalleled system of supports and services to individuals with developmental disabilities provided by not-for-profit agencies. In particular, nearly all individuals described the dedication and competent, loving care provided by DSPs. Direct support professionals were characterized over and over again as the backbone of the service delivery system, working tirelessly at many tasks to ensure the health, safety, happiness and security of the individuals that they support. The jobs of DSPs were described as difficult, mentally challenging and at times physically demanding and dangerous. In addition, family members related personal stories and described how they have come to rely on the high quality of services currently provided by DSPs to their loved ones. Parents' worries when their son or daughter moved to a residence operated by a provider were alleviated to a large extent because of the confidence they grew to have in the DSPs who provide necessary supports for their loved one on a daily basis.
Nearly all individuals opposed the lack of raises for DSPs in 2009 which they ascribed as a result of the zero percent trend factor. Many feel that DSPs have become a class of working poor because of low or insufficient wages. Individuals stated that the lack of raises caused by a zero trend factor will exacerbate existing problems with turnover and recruitment and retention of DSPs which are caused by inadequate wages. DSPs described the problems they have in making ends meet with the current low wages, such as working two jobs or making hard choices between paying rent and buying food. DSPs described how much they loved their jobs but were not sure they would be able to continue working as a DSP due to the low wages. Individuals receiving services described how much they rely on DSPs for essential services and the difficulties they experience when valued DSPs leave because salaries are too low. Individuals receiving services described the emotional impact that occurs when DSPs leave their jobs and sever relationships. It was also stated that the quality of services can often be significantly diminished while new staff "learn the ropes" of the job, and the new staff may not be of the same high quality. Individuals also noted that turnover or the provision of services by less qualified staff can lead to costly mistakes. They observed that additional resources might also be required to address health problems or increases in challenging behaviors resulting from turnover caused by inadequate salaries.
Many alluded to the disparity in earnings between DSPs in the not-for-profit sector compared to State employees doing virtually identical jobs and the fact that State employees benefited from a 3 percent raise this year.
Some individuals stated that a positive trend factor for not-for-profit agencies would not result in additional State expenditures and therefore they did not understand why the State would enact a zero percent trend factor.
Repeatedly, the lack of a trend factor was viewed as in effect a cut in funding for staff salaries. Inflation in the cost of essential items (such as the cost of heat) or other increases in costs such as new local taxes, mean that less dollars are available to pay staff.
Many individuals recognized the trend factor as the key to program continuation and fiscal stability. Individuals from some agencies described the fiscal consequences of the zero trend as exacerbating preexisting program deficits, with negative impacts on the provision of services. It was stated that the zero trend could threaten the fiscal viability of some programs or agencies and could lead to program closures.
Some providers stated that the zero trend factor could detrimentally affect relationships with their banks and lending institutions as loans are approved predicated on the fiscal viability of providers and their ability to substantiate revenue streams.
All of the individuals urged that the State include a positive trend factor for this year or advocated for the inclusion of a positive trend factor in next year's budget.
There were a few proposals suggested as alternatives to the zero trend. They included: streamlining compliance measures for COMPASS agencies by allowing offsite audits, self-disclosures and eliminating duplicative oversight particularly in regard to documentation review; reallocating funds from the highly compensated to direct support staff; reducing funding to Article 16 clinics whose merits were questioned; and eliminating IRAs that serve only a few individuals as they are costly to operate. On the revenue side, one comment urged the State to maximize its Medicaid reimbursement.
Response:
OMRDD appreciates all of the individuals who chose to share their reactions and thoughts through correspondence and testimony.
OMRDD is itself a service provider, and in fact is one of the largest service providers in the nation. OMRDD services also received a zero trend factor in 2009. OMRDD consequently understands firsthand the effects of receiving a zero trend and the difficult choices that providers face in balancing the issues raised.
OMRDD has historically increased operating revenues to providers on an annual basis through the implementation of trend factors. Their purpose has been to ensure that provider reimbursement stays abreast of inflation and to provide resources that enable providers to attract and appropriately compensate staff. For the nine years before 2009, relatively robust economies have dictated annual trend factors averaging 4.84 percent. Once applied, the trend factors accumulated and compounded.
The current economic landscape is vastly different from the ones that gave impetus to the previous trend factors. The economy is in a recession and the State is facing a budget deficit of a size not seen since the Great Depression.
Economic realities, coupled with the fact that OMRDD providers are receiving additional funding in the form of health care adjustments, all played a factor in the Governor and Legislature's decision not to include any funding in the budget for a trend factor in this State fiscal year. All providers, including OMRDD, are doing without a trend factor for 2009.
OMRDD would also like to point out that, in contrast to views or comments, all trend factors do require additional state funding.
OMRDD is strongly committed to working with providers to support direct service professionals in a variety of ways. Among these, the Health Care Adjustments included in the OMRDD budget were primarily targeted to aid direct support professionals and to assist in the recruitment and retention of those professionals. The absence of a trend factor is offset in part by the availability of Health Care Adjustment funds.
OMRDD regulations must be consistent with the enacted 2009-2010 NYS Budget which included a zero trend factor. OMRDD is consequently unable to grant a positive trend factor for 2009 in its regulations.
While there is not expected to be a reinstatement of positive trend factors in the current NYS budget, the comments will be taken into consideration in the development of next year's NYS budget.
