PDD-16-11-00016-P Limits on Reimbursement of Group Day Habilitation, Supplemental Group Day Habilitation, and Prevocational Services

4/20/11 N.Y. St. Reg. PDD-16-11-00016-P

NEW YORK STATE REGISTER

VOLUME XXXIII, ISSUE 16

April 20, 2011

RULE MAKING ACTIVITIES

OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. PDD-16-11-00016-P

Limits on Reimbursement of Group Day Habilitation, Supplemental Group Day Habilitation, and Prevocational 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(c)(7) and (e)(8) of Title 14 NYCRR.

Statutory authority:

Mental Hygiene Law, section 13.09(b)

Subject:

Limits on reimbursement of Group Day Habilitation, Supplemental Group Day Habilitation, and Prevocational Services.

Purpose:

To impose stricter limits on reimbursement of services per person per day.

Text of proposed rule:

Paragraph 635-10.5(c)(7) is amended as follows:

(7) Billing limits for group day habilitation and supplemental group day habilitation.

(i) [On a given day, a maximum of one and a half units per consumer, either one full unit and one half unit, or three half units, may be reimbursed for:]

[(a) group day habilitation only; or]

[(b) any combination of group day habilitation or prevocational services (see subdivision (e) of this section).]

On a given day, for an individual who does not receive supplemental group day habilitation on that day, a maximum of the following may be reimbursed:

(a) one full unit of group day habilitation; or

(b) one full unit of a blended service which includes group day habilitation (a blended service is a combination of day habilitation, prevocational services (see subdivision (e) of this section) and/or supported employment services); or

(c) any combination of two half units of: group day habilitation, prevocational services or blended services.

(ii) On a given day, for an individual who receives supplemental group day habilitation on that day, a maximum of one and a half units (either one full unit and one half unit, or three half units) may be reimbursed for any combination of group day habilitation, supplemental group day habilitation, prevocational services or blended services.

(iii) On a given day, a maximum of one full unit per [consumer] individual, either one full unit or two half units, may be reimbursed for supplemental group day habilitation.

(iv) Where more than one agency delivers services on a given day to the same individual, the total number of units billed for that day by all agencies may not exceed the maximum allowed daily units described in subparagraphs (i), (ii) and (iii) of this paragraph.

(v) Exceptions.

(a) An agency providing, or proposing to provide, services to an individual who is eligible to receive supplemental group day habilitation may request a waiver from the limits established in subparagraph (ii) of this paragraph.

(b) The billing limits established in subparagraph (ii) of this paragraph may be waived on an individual basis by the commissioner if the commissioner finds, based on the request submitted by the agency:

(1) that services in excess of the limit are necessary to preserve the health or safety of the individual; and

(2) that alternative services which are not subject to the limit have been considered to meet the health or safety needs of the individual, but that the alternative services are either inappropriate and/or unavailable.

(c) Any waiver by the commissioner shall specify the maximum number of units of service that may be reimbursed for services to the individual on a given day and shall specify the duration of the waiver. In no case shall the waiver period exceed six months. The approval may be extended (or re-extended) by the commissioner at the end of the specified period for an additional specified period which cannot exceed six months.

Paragraph 635-10.5(e)(8) is amended as follows:

(8) Billing limits for prevocational services.

(i) [On a given day, a maximum of one and a half units per consumer, either one full unit and one half unit, or three half units, may be reimbursed for:]

[(a) prevocational services; or]

[(b) any combination of prevocational services or group day habilitation.]

On a given day, for an individual who does not receive supplemental group day habilitation (see subdivision (c) of this section) on that day, a maximum of the following may be reimbursed:

(a) one unit of prevocational services; or

(b) one full unit of a blended service which includes prevocational services (a blended service is a combination of day habilitation, prevocational services and/or supported employment services); or

(c) any combination of two half units of: group day habilitation, prevocational services or blended services.

(ii) On a given day, for an individual who receives supplemental group day habilitation on that day, a maximum of one and a half units (either one full unit and one half unit, or three half units) may be reimbursed for any combination of group day habilitation, supplemental group day habilitation, prevocational services or blended services.

[(ii)] (iii) Where more than one agency delivers services on a given day to the same [consumer] individual, the total number of units billed for that day by all agencies may not exceed the maximum allowed daily units described in [subparagraph] subparagraphs (i) and (ii) of this paragraph.

(iv) Exceptions.

(a) An agency providing, or proposing to provide, services to an individual who is eligible to receive supplemental group day habilitation may request a waiver from the limits established in subparagraph (ii) of this paragraph.

(b) The billing limits established in subparagraph (ii) of this paragraph may be waived on an individual basis by the commissioner if the commissioner finds, based on the request submitted by the agency:

(1) that services in excess of the limit are necessary to preserve the health or safety of the individual; and

(2) that alternative services which are not subject to the limit have been considered to meet the health or safety needs of the individual, but that the alternative services are either inappropriate and/or unavailable.

(c) Any waiver by the commissioner shall specify the maximum number of units of service that may be reimbursed for the individual on a given day and shall specify the duration of the waiver. In no case shall the waiver period exceed six months. The approval may be extended (or re-extended) by the commissioner at the end of the specified period for an additional specified period which cannot exceed six months.

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:

45 days after publication of this notice.

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: 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).

2. Legislative objectives: These proposed amendments further the legislative objectives embodied in section 13.09(b) of the Mental Hygiene Law. The proposed amendments revise limitations on reimbursement of Group Day Habilitation Services, Supplemental Group Day Habilitation Services and Prevocational Services.

3. Needs and benefits: Several years ago, OPWDD revised the unit of service for Day Habilitation Services and Prevocational Services. The unit of service for Group Day Habilitation, Supplemental Group Day Habilitation and Prevocational Services became a full unit. The program day duration for a full unit was established with a minimum of 4 hours and a maximum of 6 hours. (A half unit has a program day duration of a minimum of 2 hours.)

When OPWDD established the billing requirements related to the program day duration, the expectation was that providers would bill for a full unit of services regardless of whether the program day duration was at the lower or higher end of the spectrum. However, OPWDD has become aware that some providers modified routine service delivery practices so that many individuals would be served for a program day duration of slightly more than 6 hours, allowing the provider to bill for both a full unit and a half unit. These providers should generally be reimbursed for the provision of a full unit of service to these individuals per day (not for a unit and a half) and OPWDD has proposed these regulations in an attempt to better align reimbursement with actual service provision.

The existing regulations limit the number of units that will be reimbursed for services delivered in a given day per individual. For Group Day Habilitation, Prevocational Services, or a combination of these services, the current reimbursement limit is one and a half units. Reimbursement for Supplemental Group Day Habilitation is limited to one full unit or two half units per day per person. To move toward better alignment of reimbursement and service provision, the proposed regulations impose stricter limits.

For providers serving individuals who do not receive Supplemental Group Day Habilitation (which has a start time of 3:00 P.M. or later on weekdays or anytime on the weekend), the reimbursement would be limited be a full unit or two half units of any combination of Group Day Habilitation, Prevocational Services and/or blended services (which are a combination of Group Day Habilitation, Prevocational Services and/or Supported Employment Services). Individuals who live in a supervised residence certified by OPWDD (e.g., a supervised Individualized Residential Alternative or a supervised Community Residence) are not eligible to receive Supplemental Group Day Habilitation, so this limit would be applicable to reimbursement of services provided to these individuals. Individuals who live in supervised residences are receiving residential habilitation on a daily basis. The needs of these individuals for habilitation services should be adequately met with this limit. More than one full unit per day of Group Day Habilitation and/or Prevocational Services is not needed by these individuals in any circumstance.

Individuals who do not live in a supervised residence are eligible to receive Supplemental Group Day Habilitation. For providers serving these individuals, a limit is imposed on reimbursement of one and a half units per day for of any combination of Group Day Habilitation, Supplemental Group Day Habilitation, Prevocational Services, and/or blended services. This limit is more generous than the limit on reimbursement for individuals who live in supervised residences, in recognition of the fact that individuals not living in supervised residences are receiving limited or no residential habilitation. However, the new limit is more restrictive than the current limit of one and a half units of Group Day Habilitation and/or Prevocational Services. OPWDD considers that providers will almost always be able to meet the needs of the individuals for the services within the new limit. OPWDD recognizes that some individuals may be receiving more than this level of services currently, with providers being paid for this higher level of services; and in rare circumstances providers newly subject to the limits may need to provide other types of services or provide services over the limits in order to meet the individual's needs for health and safety. In recognition of this possibility, the proposed regulations establish procedures for providers to request a waiver of this limit in rare circumstances when services in excess of the limit are necessary to preserve the health or safety of the individual. The limit of reimbursement for one full unit or two half units of Supplemental Group Day Habilitation per day per individual is unchanged.

In addition, New York State is seeking to achieve efficiencies in its Medicaid program including Medicaid funded services overseen by OPWDD. The proposed regulations will result in a reduction in Medicaid expenditures for New York State. With rare exceptions, the effect of the regulation will be a reduction in reimbursement to providers who routinely delivered a day of services lasting slightly more than six hours so that the provider could bill for both a full unit and a half unit. In these situations, providers are expected to continue to provide a similar level of service to the individuals while reimbursement is adjusted to the more appropriate level that was originally intended.

4. Costs:

a. Costs to the Agency and to the State and its local governments: There is an approximate $6.8 million savings in Medicaid that will be evenly shared by the State (approximately $3.4 million) and the federal (approximately $3.4 million) governments. There will be no savings to local governments as a result of these amendments concerning some individuals receiving day habilitation or prevocational services because pursuant to Social Services Law sections 365 and 368-a, either local governments incur no costs for these services or the State reimburses local governments for their share of the cost of Medicaid funded programs and services. Concerning the remainder of individuals, for the current State fiscal year, there are no savings to local governments as a result of these 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. Overall compliance costs will be lower as costs associated with billing and documenting services will be reduced. The limits on reimbursement imposed by the proposed amendments are expected to result in a decrease of approximately $6.8 million in aggregate funding to providers of Group Day Habilitation Services, Supplemental Group Day Habilitation Services, and Prevocational 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 may result in less paperwork as providers will be billing for fewer services. Since fewer services will be billed, documentation requirements will be reduced in some cases. For example, providers that would bill for a full unit of Group Day Habilitation Services for approximately six hours of service, instead of a full unit and a half unit, would only be required to document a minimum of two face-to-face services instead of three services.

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: OPWDD originally considered limiting reimbursement of services to 5 full units or equivalent a week per individual. However, OPWDD considered this insufficient to meet the needs of all individuals, particularly individuals who do not live in supervised residences. OPWDD considers the imposition of a daily limitation to be preferable as it accomplishes virtually the same goal while simplifying compliance.

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. OPWDD will be informing providers of the necessary changes in billing procedures with sufficient time in advance of the July 1 effective date so that changes can be made and are in effect on that date.

Regulatory Flexibility Analysis

1. Effect on small business: The OPWDD has determined, through a review of the certified cost reports, that most OPWDD-funded Home and Community Based Services (HCBS) Waiver Group Day Habilitation, Supplemental Group Day Habilitation, and Prevocational 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 estimated to be 165 agencies which receive reimbursement for the provision of services to individuals in excess of the limits that would be imposed by these regulations. 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 $6.8 million dollars in funding to providers of these 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. Conversely, since fewer services will be billed, documentation requirements will be reduced. For example, providers that would bill for a full unit of Group Day Habilitation for approximately six hours of service, instead of a full unit and a half unit, would only be required to document a minimum of two face-to-face services instead of three services.

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. Overall compliance costs will be lower as costs associated with billing and documenting services will be reduced.

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 impose stricter limitations on reimbursement of Group Day Habilitation, Supplemental Group Day Habilitation, and Prevocational Services. OPWDD determined that providers would still be adequately reimbursed for the delivery of services without reducing actual services to individuals. Current methodologies for the reimbursement of these services were established to accommodate a program day duration of four to six hours for a full unit. OPWDD considers that providers which were billing for a full unit and a half unit for approximately six hours of service would more appropriately be compensated for a full unit of services. The proposed amendments better align reimbursement with service delivery.

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. The proposed regulations allow providers to request a waiver of the limits if services in excess of the limits are necessary to preserve the health or safety of the individual. Since these amendments otherwise reduce compliance activities required of regulated parties, the other approaches outlined in section 202-b(1) cannot be effectively applied.

OPWDD determined that the reduction in reimbursement 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, March 16, and March 21, 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 $6.8 million in funding to providers of HCBS Waiver Group Day Habilitation Services, Supplemental Group Day Habilitation Services and Prevocational Services, for all of New York State. While the reduction in funding will have an adverse fiscal impact on impacted providers, 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. Conversely, since fewer services will be billed, there will be a reduction in required compliance activities associated with documentation. For example, providers that would bill for a full unit of Group Day Habilitation Services for approximately six hours of service, instead of a full unit and a half unit, would only be required to document a minimum of two face-to-face services instead of three services.

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. Overall compliance costs will be lower as costs associated with billing and documenting services will be reduced.

5. Minimizing adverse economic impact: The purpose of these proposed amendments is to impose stricter limitations on reimbursement of Group Day Habilitation, Supplemental Group Day Habilitation, and Prevocational Services. OPWDD determined that providers would still be adequately reimbursed for the delivery of services without reducing actual services to individuals. Current methodologies for the reimbursement of these services were established to accommodate a program day duration of four to six hours for a full unit. OPWDD considers that providers which were billing for a full unit and a half unit for approximately six hours of services would be more appropriately compensated for one full unit of services. The proposed amendments better align reimbursement with service delivery.

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. The proposed regulations establish procedures for providers to request a waiver of the limits when services in excess of the limit are necessary to preserve the health or safety of the individual. Since these amendments otherwise reduce specific compliance activities required of regulated parties, the other approaches outlined in section 202-bb(2)(b) cannot be effectively applied.

OPWDD determined that the reduction in reimbursement 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.

6. Participation of public and private interests in rural areas: The proposed regulations were discussed at meetings with representatives of providers, on March 8, March 16, and March 21, 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. Finally, OWPDD will be mailing these proposed amendments to all providers 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. As described in the Regulatory Impact Statement, the proposed amendments impose stricter limits on the reimbursement of HCBS Waiver Group Day Habilitation Services, Supplemental Group Day Habilitation Services and Prevocational Services by limiting the amount of services that can be reimbursed per individual for a given day. Except in rare circumstances, OPWDD does not expect these amendments to result in any significant reduction in services delivered to individuals. Consequently, any reduction in jobs that might occur would be minimal.