PDD-15-11-00023-P Efficiency Adjustment for HCBS Waiver Respite Services

4/13/11 N.Y. St. Reg. PDD-15-11-00023-P

NEW YORK STATE REGISTER

VOLUME XXXIII, ISSUE 15

April 13, 2011

RULE MAKING ACTIVITIES

OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES

PROPOSED RULE MAKING

HEARING(S) SCHEDULED

 

I.D No. PDD-15-11-00023-P

Efficiency Adjustment for HCBS Waiver Respite Services

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Amendment of section 635-10.5 of Title 14 NYCRR.

Statutory authority:

Mental Hygiene Law, sections 13.09(b) and 43.02

Subject:

Efficiency adjustment for HCBS waiver respite services.

Purpose:

To implement an efficiency adjustment by modifying the price methodology for HCBS waiver respite services.

Public hearing(s) will be held at:

11:00 a.m., May 31, 2011 at Capital District DDSO, Bldg. 3, Rm. 1, 500 Balltown Rd., Schenectady, NY; and 11:00 a.m., June 2, 2011 at 75 Morton St., New York, NY.

Interpreter Service:

Interpreter services will be made available to hearing impaired persons, at no charge, upon written request submitted within reasonable time prior to the scheduled public hearing. The written request must be addressed to the agency representative designated in the paragraph below.

Accessibility:

All public hearings have been scheduled at places reasonably accessible to persons with a mobility impairment.

Text of proposed rule:

Subparagraph 635-10.5(h)(3)(iii) is amended as follows:

(iii) For operating prices:

(a) The unit of service shall be one hour equaling 60 minutes.

(b) The provider may claim reimbursement in 15-minute increments, as the service is documented.

(c) [OMRDD] OPWDD shall determine the price by dividing the [OMRDD] OPWDD approved total annual budgeted costs by the corresponding projected hours of utilization. [OMRDD] OPWDD shall approve budgeted costs if they are reasonable, related to respite services and consistent with efficiency, economy and quality of care. The approved total annual budgeted costs established for newly certified sites after June 30, 2011, shall reflect a 2 percent reduction in operating costs as was implemented for providers on July 1, 2011, pursuant to clause (d) of this subparagraph.

(d) Effective July 1, 2011, prices shall be revised to reflect a 2 percent reduction to the price in effect on June 30, 2011.

Text of proposed rule and any required statements and analyses may be obtained from:

Barbara Brundage, Director, Regulatory Affairs Unit, OPWDD, 44 Holland Avenue, Albany, New York 12229, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

Five days after the last scheduled public hearing.

Additional matter required by statute:

Pursuant to the requirements of the State Environmental Quality Review Act, OPWDD, 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. OPWDD has the statutory 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. OPWDD has the statutory responsibility for setting Medicaid rates and fees for services in facilities licensed or operated by OPWDD, as stated in section 43.02 of the Mental Hygiene Law.

2. Legislative objectives: These proposed amendments further the legislative objectives embodied in sections 13.09(b) and 43.02 of the Mental Hygiene Law. The proposed amendments are necessary to make adjustments to the reimbursement methodology applicable to Home and Community Based Services (HCBS) waiver respite services.

3. Needs and benefits: New York State is seeking to achieve efficiencies in its Medicaid program including Medicaid funded services overseen by OPWDD. One such identified efficiency will be a reduction in HCBS waiver respite services funding. The current operating component of the HCBS waiver respite services price will be reduced by 2 percent for all providers.

Implementation of this decrease in prices will assist in achieving Medicaid efficiency for New York State. It is believed that service providers will be able to absorb this reduction while not reducing supports or services or service quality due to the payment of recent trend factor increases (3.06% for 2009 and 2.08% for 2010) and with the implementation of efficiency measures.

Additionally, OPWDD created a Fiscal Sustainability Team which included individuals, advocates, service providers and OPWDD staff. Although the purpose of the Team was not to discuss the option of reducing HCBS waiver respite services funding, there was discussion on approaches to efficiency that would allow support and service levels to be maintained in concert with funding reductions. OPWDD continues to explore various proposals that would offer providers greater mandate relief.

4. Costs:

a. Costs to the Agency and to the State and its local governments: There is an approximate $1.4 million savings in Medicaid that will be evenly shared by the State (approximately $700,000) and the Federal (approximately $700,000) Governments. There will be no savings to local governments as a result of these specific amendments. For the current State fiscal year, there are no costs to local governments as a result of these specific amendments because Chapter 58 of the Laws of 2005 places a cap on the local share of Medicaid costs.

b. Costs to private regulated parties: There are neither initial capital investment costs nor initial non-capital expenses. There are no additional costs associated with implementation and continued compliance with the rule. The proposed amendments are expected to result in a decrease of approximately $1.4 million in aggregate funding to providers of HCBS waiver respite services.

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: The proposed amendments do not require any additional paperwork to be completed by providers.

7. Duplication: The proposed amendments do not duplicate any existing State or Federal requirements that are applicable to services for persons with developmental disabilities.

8. Alternatives: In developing this regulatory proposal, OPWDD consulted with representatives of provider associations and considered alternatives to achieve the desired efficiencies in the Medicaid funded services overseen by OPWDD. OPWDD determined that the 2 percent operating reduction proposed in this amendment, in concert with other proposals, is the most optimal approach in achieving efficiencies without diminishing the quality of services provided to individuals and while minimizing any adverse impact on providers.

9. Federal standards: The proposed amendments do not exceed any minimum standards of the federal government for the same or similar subject areas.

10. Compliance schedule: OPWDD expects to finalize the proposed amendments effective July 1, 2011. There are no additional compliance activities associated with these amendments.

Regulatory Flexibility Analysis

1. Effect on small business: OPWDD has determined, through a review of the certified cost reports, that most HCBS waiver respite services are provided by non-profit agencies which employ more than 100 people overall. However, some smaller agencies which employ fewer than 100 employees overall would be classified as small businesses. Currently, there are 266 agencies that provide HCBS waiver respite services. OPWDD is unable to estimate the portion of these providers that may be considered to be small businesses.

The proposed amendments have been reviewed by OPWDD in light of their impact on small businesses. The proposed amendments are expected to result in a decrease of approximately 1.4 million dollars in funding to providers of HCBS waiver respite services. OPWDD has determined that these amendments will not result in increased costs for additional services or increased compliance requirements.

2. Compliance requirements: The proposed amendments do not impose any additional reporting, recordkeeping or other compliance requirements on providers.

The amendments will have no effect on local governments.

3. Professional services: There are no additional professional services required as a result of these amendments and the amendments will not add to the professional service needs of local governments.

4. Compliance costs: There are no compliance costs since the proposed amendments will not impose any additional compliance requirements on providers.

5. Economic and technological feasibility: The proposed amendments do not impose on regulated parties the use of any new technological processes.

6. Minimizing adverse economic impact: The purpose of these proposed amendments is to revise the reimbursement methodologies for HCBS waiver respite services in order to achieve efficiencies in the Medicaid funded services overseen by OPWDD. OPWDD determined that it could adjust prices for HCBS waiver respite services to encourage efficiencies in operation and still adequately reimburse providers of such services. The proposed amendments represent OPWDD's best effort at adjusting reimbursement in a way which will accommodate the realization of efficiencies where they can best be achieved and afforded, and with the most equitable distribution possible.

OPWDD has also reviewed and considered the approaches for minimizing adverse economic impact as suggested in section 202-b(1) of the State Administrative Procedure Act. Since these amendments require no specific compliance response of regulated parties, the approaches outlined cannot be effectively applied.

OPWDD determined that the 2 percent operating reduction proposed in this amendment, in concert with other proposals, is the most optimal approach in achieving efficiencies without diminishing the quality of services provided to individuals and while minimizing any adverse impact on providers.

7. Small business participation: The proposed regulations were discussed with representatives of providers, including the New York State Association of Community and Residential Agencies (NYSACRA), on March 8 and March 16, 2011. In addition, the proposed regulations were discussed at a meeting of the Fiscal Sustainability Team, also on March 8. NYSACRA was part of the Fiscal Sustainability Team. Some of the members of NYSACRA have fewer than 100 employees. Finally, OWPDD will be mailing these proposed amendments to all providers, including providers that are small businesses.

Rural Area Flexibility Analysis

1. Description of the types and estimation of the number of rural areas in which the rule will apply: OPWDD services are provided in every county in New York State. 44 counties have a population less than 200,000: Allegany, Cattaraugus, Cayuga, Chautauqua, Chemung, Chenango, Clinton, Columbia, Cortland, Delaware, Essex, Franklin, Fulton, Genesee, Greene, Hamilton, Herkimer, Jefferson, Lewis, Livingston, Madison, Montgomery, Ontario, Orleans, Oswego, Otsego, Putnam, Rensselaer, St. Lawrence, Saratoga, Schenectady, Schoharie, Schuyler, Seneca, Steuben, Sullivan, Tioga, Tompkins, Ulster, Warren, Washington, Wayne, Wyoming and Yates. 9 counties with certain townships have a population density of 150 persons or less per square mile: Albany, Broome, Dutchess, Erie, Monroe, Niagara, Oneida, Onondaga and Orange.

The proposed amendments have been reviewed by OPWDD in light of their impact on entities in rural areas. The proposed amendments are expected to result in a decrease of approximately 1.4 million dollars in funding to providers of HCBS waiver respite services for all of New York State. While the reduction in funding will have an adverse fiscal impact on providers of HCBS waiver respite services, the geographic location of any given program (urban or rural) will not be a contributing factor to any such impact.

2. Compliance requirements: The proposed amendments do not impose any additional reporting, recordkeeping or other compliance requirements on providers.

The amendments will have no effect on local governments.

3. Professional services: There are no additional professional services required as a result of these amendments and the amendments will not add to the professional service needs of local governments.

4. Compliance costs: There are no compliance costs since the proposed amendments will not impose any additional compliance requirements on providers or local governments.

5. Minimizing adverse economic impact: The proposed amendments revise the reimbursement methodologies for HCBS waiver respite services in order to achieve efficiencies in the Medicaid funded services overseen by OPWDD. OPWDD determined that it could adjust prices for respite services to encourage efficiencies in operation and still adequately reimburse providers of such services, including providers in rural areas. OPWDD determined that the 2 percent operating reduction proposed in this amendment, in concert with other proposals, is the most optimal approach in achieving efficiencies without diminishing the quality of services provided to individuals and while minimizing any adverse impact on providers.

OPWDD has also reviewed and considered the approaches for minimizing adverse economic impact as suggested in section 202-bb(2)(b) of the State Administrative Procedure Act. Since these amendments impose no compliance requirements on regulated parties or local governments, the approaches outlined in section 202-bb(2)(b) cannot be effectively applied.

6. Participation of public and private interests in rural areas: The proposed regulations were discussed at meetings with representatives of providers on March 8 and March 16, 2011. In addition, the proposed regulations were discussed at a meeting of the Fiscal Sustainability Team, also on March 8. The Fiscal Sustainability Team includes self-advocates, family members, and representatives of providers. Provider associations which were present, such as NYSARC, the NYS Association of Community and Residential Agencies, NYS Catholic Conference, and CP Association of NYS, represent providers throughout NYS, including those in rural areas.

Job Impact Statement

A job impact statement is not being submitted for these proposed amendments because OPWDD determined that they will not cause a loss of more than 100 full-time annual jobs State wide. The proposed amendments decrease the respite reimbursement prices by 2%. Based on conversations with providers and provider associations, OPWDD expects that any provider without sufficient surpluses to absorb all of the efficiency adjustment will adjust operations and spending in areas other than staffing, so as not to reduce supports or services or service quality. Moreover, the total state-wide impact of the efficiency adjustment is not at a level sufficient to effect a decrease of more than 100 full-time annual jobs. The total decrease in funding to all respite providers will be $1.4 million, and the average staff salary in the respite program, including fringe benefits, is $31,045. Even if, contrary to OPWDD and providers’ expectations, every respite provider reduced staffing levels by 2%, there would be a total loss of 45.09 full-time annual jobs statewide.