PDD-16-11-00012-A Reimbursement Methodology for Group Day Habilitation Services and Supplemental Group Day Habilitation Services

6/29/11 N.Y. St. Reg. PDD-16-11-00012-A

NEW YORK STATE REGISTER

VOLUME XXXIII, ISSUE 26

June 29, 2011

RULE MAKING ACTIVITIES

OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES

NOTICE OF ADOPTION

 

I.D No. PDD-16-11-00012-A

Filing No. 523

Filing Date. Jun. 14, 2011

Effective Date. Jul. 01, 2011

Reimbursement Methodology for Group Day Habilitation Services and Supplemental Group Day Habilitation Services

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

Action taken:

Amendment of section 635-10.5(c) of Title 14 NYCRR.

Statutory authority:

Mental Hygiene Law, sections 13.09(b) and 43.02

Subject:

Reimbursement methodology for group day habilitation services and supplemental group day habilitation services.

Purpose:

To modify the reimbursement methodology for group day habilitation services effective July 1, 2011.

Text or summary was published

in the April 20, 2011 issue of the Register, I.D. No. PDD-16-11-00012-P.

Final rule as compared with last published rule:

No changes.

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

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

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.

Assessment of Public Comment

OPWDD received two comments from voluntary providers. The comments and OPWDD's responses follow.

Comment: An agency urged that the amendments (this one among others) be withdrawn because the proposed changes depart from the three "core principles" that define the relationship between the State and voluntary providers. It asserted that efficient providers reserve funds to accommodate special needs as they arise; that providers need a safety net in the form of the appeal mechanism to address "unforeseen operating losses;" and that interchange allows providers to reallocate funds between cost centers and programs to meet changing needs and compensates for a reimbursement system that is "neither scientific nor accurate." It contended that "these three principles have been violated by the proposed regulations."

Response: OPWDD will not be withdrawing the regulations. The amendments were designed to encourage operating efficiencies. Aspects of the regulations were formulated to reduce surplus funding by more closely aligning reimbursement with actual costs. The appeals process was amended to be better synchronized with OPWDD's prospective reimbursement methodologies. OPWDD has a long established tradition of reaching out to stakeholders for their input before instituting systemic changes to programs and payments. Providers through provider associations participated in numerous discussions during the development stage of these amendments. With respect to the interchange restriction, OPWDD is responding to providers by repealing this aspect of the amendments in order to avoid negative consequences to those providers already demonstrating the greatest levels of efficiency. This will occur through a separate emergency rule making action that is timed to coincide with the adoption of these regulations.

Comment: A second provider expressed its view that the methodology employed to effect the price reductions should not include exemptions for any providers. It insisted that every provider should "shoulder" the burden and "contribute its fair share to the budget cut." It opined that non-exempt providers will be forced to discharge individuals in order to downsize and that those individuals will migrate to exempt providers for services. It projected that a consequent "revenue transfer" from non-exempt to exempt providers will ensue with agency survival paralleling the monetary movement. It objected to the focus of the exemption criteria on personal services and expounded that by cutting personal services reimbursement without regard to provider status in terms of Other Than Personal Services (OTPS), providers which have experienced losses in OTPS are precluded from using interchange to fund those legitimate expenses. The provider also opposed the inclusion of program administrative expenses in the equation for determination of the administrative efficiency adjustment because it discerns a distinction between agency and program administration that skews the results. In its view, program administrative staff who provide clinic oversight command higher compensation than agency administrative staff, and therefore only agency administration expenses should be utilized for the purposes of the administrative reduction. Finally, this provider states that the methodology fails to take into account an efficiency adjustment that is already in place. Because that efficiency adjustment is not distributed to the cost categories on the price sheets, identified surpluses are overstated in the calculations.

Response: In designing the methodology, OPWDD attempted to be sensitive to those providers which operated without surplus reimbursement or at exceptionally efficient levels. For such providers, reductions could cause severe hardships and OPWDD elected not to impose reductions on providers with the least ability to sustain them. OPWDD selected personal services as the object of the efficiency adjustments because its statistical analysis indicated this and the associated cost categories were being overfunded. OPWDD purposely did not target OTPS because, as a component of Non-personal Services (NPS), it was subject to an efficiency adjustment in May, 2010 in Group and Supplemental Group Day Habilitation and in October, 2010 in supervised IRAs and supervised CRs. OPWDD considers that the prospect of agency downsizing to accommodate to these funding reductions is improbable because the reductions targeted surpluses. Further, OPWDD notes that regulatory safeguards are in place to protect individuals in the event that an agency seeks to discharge them. These safeguards can be found in 14 NYCRR Section 633.12.

The provider is incorrect in classifying clinical oversight as program administration. Both agency and program administration categories are intended to represent purely administrative functions and clinic oversight is a clinical function and belongs in the clinical cost category.

Finally, the writer identifies an earlier efficiency adjustment that if taken into account could potentially reduce the surplus derived by OPWDD's calculations for the personal services efficiency adjustment. OPWDD observes that the earlier efficiency adjustment was intended to be permanent. Introducing it into the equation concerning the present amendments would diminish its effect. Moreover, OPWDD has no means to determine how an individual provider might have absorbed and distributed the effects of that efficiency adjustment.