Home » 2013 Issues » July 17, 2013 » PDD-29-13-00014-EP Reimbursement of Prevocational Services Delivered in Sheltered Workshops
PDD-29-13-00014-EP Reimbursement of Prevocational Services Delivered in Sheltered Workshops
7/17/13 N.Y. St. Reg. PDD-29-13-00014-EP
NEW YORK STATE REGISTER
VOLUME XXXV, ISSUE 29
July 17, 2013
RULE MAKING ACTIVITIES
OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES
EMERGENCY/PROPOSED RULE MAKING
NO HEARING(S) SCHEDULED
I.D No. PDD-29-13-00014-EP
Filing No. 703
Filing Date. Jul. 01, 2013
Effective Date. Jul. 01, 2013
Reimbursement of Prevocational Services Delivered in Sheltered Workshops
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Proposed Action:
Amendment of section 635-10.5 of Title 14 NYCRR.
Statutory authority:
Mental Hygiene Law, sections 13.07, 13.09(b), 16.00 and 43.02
Finding of necessity for emergency rule:
Preservation of public health, public safety and general welfare.
Specific reasons underlying the finding of necessity:
The emergency adoption of these amendments, which limit reimbursement of prevocational services delivered in sheltered workshops, is necessary to protect the health, safety, and welfare of individuals receiving services in the OPWDD system.
Working with the Federal government to transform its service delivery system, OPWDD made a number of commitments to the Centers for Medicare and Medicaid Services (CMS) as outlined in a transformation agreement. In this agreement, OPWDD made a specific commitment to no longer fund new admissions to sheltered workshops effective July 1, 2013. An essential component of fulfilling this commitment is the promulgation of regulations to limit reimbursement of prevocational services in sheltered workshops to only those individuals who were receiving these services before July 1, 2013.
It was not possible to promulgate regulations that achieve the July 1 effective date using the regular rulemaking process established by the State Administrative Procedure Act (SAPA). If OPWDD did not promulgate these regulations on an emergency basis, OPWDD would fail to meet its commitment to CMS and would risk loss of the substantial federal funding that is contingent on this commitment. The loss of this federal funding could jeopardize the health, safety, and welfare of individuals receiving services in the OPWDD system, as without it, individuals would be at risk of receiving services that are inadequate or insufficient in meeting their needs.
Subject:
Reimbursement of prevocational services delivered in sheltered workshops.
Purpose:
To establish limits on the reimbursement of prevocational services delivered in sheltered workshops.
Text of emergency/proposed rule:
Subdivision 635-10.5(e) is amended by the addition of a new paragraph (10) as follows:
(10) Reimbursement of prevocational services delivered in sheltered workshops.
(i) Effective July 1, 2013, reimbursement of prevocational services delivered in a sheltered workshop is limited to those individuals who were receiving prevocational services in a sheltered workshop on a regular basis as of June 30, 2013 and who continuously receive prevocational services in a sheltered workshop on a regular basis on and after July 1, 2013.
(ii) Reimbursement of prevocational services delivered in a sheltered workshop is limited to services delivered to the individuals specified in subparagraph (i) of this paragraph either:
(a) by the same provider which was providing services for the individual on a regular basis as of June 30, 2013; or
(b) by a different provider if the individual’s receipt of the services from the different provider is the result of one provider assuming operation or control of the other provider’s operations and programs, or is the result of a merger or consolidation of providers.
Note: Current paragraphs (10) – (13) are renumbered to be paragraphs (11) – (14).
This notice is intended:
to serve as both a notice of emergency adoption and a notice of proposed rule making. The emergency rule will expire September 28, 2013.
Text of rule and any required statements and analyses may be obtained from:
Barbara Brundage, Director of Regulatory Affairs (RAU), OPWDD, 44 Holland Avenue, Albany, NY 12229, (518) 474-1830, email: RAU.Unit@opwdd.ny.gov
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 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 responsibility to provide and encourage the provision of appropriate programs and services in the area of care, treatment, rehabilitation, education and training of persons with developmental disabilities, as stated in the New York State Mental Hygiene Law Section 13.07.
b. OPWDD has the 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).
c. OPWDD has the statutory authority to adopt regulations concerning the operation of programs, provision of services and facilities pursuant to the New York State Mental Hygiene Law Section 16.00.
d. OPWDD has the statutory responsibility for setting Medicaid rates and fees for services in facilities licensed or operated by OPWDD pursuant to the New York State Mental Hygiene Law Section 43.02.
2. Legislative objectives: The emergency/proposed amendments further the legislative objectives embodied in sections 13.07, 13.09, 16.00, and 43.02 of the Mental Hygiene Law. The new amendments concern the reimbursement of prevocational services delivered in sheltered workshops.
3. Needs and benefits: In striving to transform and enhance its service delivery system, OPWDD made a commitment to the Centers for Medicare and Medicaid Services (CMS) in the form of a transformation agreement. The transformation agreement identifies a series of shared goals between OPWDD and CMS, one of which is the goal to increase the number of individuals in competitive employment by 700 within a one year time period. Toward this goal, OPWDD committed to no longer fund new admissions to sheltered workshops effective July 1, 2013. Consequently, the emergency/proposed amendments limit reimbursement of prevocational services delivered in sheltered workshops to only those individuals who were receiving these services before July 1, 2013. These amendments are necessary for OPWDD to meet its commitment to CMS and to be eligible for federal funding that is critical for appropriate and effective service provision to individuals receiving services.
OPWDD’s long-term goal is to eliminate funding for segregated employment settings such as sheltered workshops in order to better prepare individuals for competitive employment. The emergency/proposed amendments are an interim step in achieving its long-term goal. The amendments will prevent OPWDD funding for new individuals admitted into sheltered workshops in order to ensure that there is no growth in segregated employment settings. By not funding new admissions, OPWDD is encouraging people with developmental disabilities, especially students transitioning from high school to adult services, to explore options in more integrated settings. Prevocational services will continue to be funded by OPWDD if they are provided in integrated community services instead of segerated sheltered workshops. Further, OPWDD expects that individuals who might otherwise have been admitted to sheltered workshops will instead be more appropriately served through assistance with obtaining competitive employment or through other customized and more effective and efficient service options (e.g. pre-employment training, individual or group supported employment, volunteerism or retirement services).
Another important reason for the emergency/proposed amendments is that they further implement Governor Andrew M. Cuomo’s Olmstead Plan for New York State. The Governor has made serving individuals with disabilities in the most integrated setting a top priority. By integrating individuals receiving services in the OPWDD system into competitive employment settings or customized services within the community, in lieu of serving individuals in segregated sheltered workshops, OPWDD is acting in line with the Governor’s goal. Further, by stopping OWPDD funding of new admissions to a service that is not in an integrated setting, the emergency/proposed amendments are facilitating efforts to help individuals to live richer lives.
4. Costs:
a. Costs to the Agency and to the State and its local governments:
The amendments will not result in any additional costs for New York State. Conversely, the promulgation of these regulations on an emergency basis will safeguard federal funding to NYS which is contingent on the satisfaction of commitments that OPWDD made to CMS.
These amendments will not have any fiscal impact on local governments. Chapter 58 of the Laws of 2005 places a cap on the local share of Medicaid costs and local governments are already paying for Medicaid at the capped level.
Prohibiting funding for new admissions of individuals into sheltered workshops will ultimately be cost-neutral for OPWDD as a provider of services. The lack of reimbursement for new admissions will be offset by the decrease in costs/expenditures that OPWDD as a provider would typically incur with new admissions.
b. Costs to private regulated parties: There are no initial capital or investment costs. The emergency/proposed amendments will have the same fiscal impact on regulated parties as stated above in this section for state-operated 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: No additional paperwork is required by the emergency/proposed amendments.
7. Duplication: The proposed amendments do not duplicate any existing State or Federal requirements that are applicable to these services.
8. Alternatives: OPWDD could have opted to require the closure of all sheltered workshops in its system instead of only ceasing payment for new admissions to sheltered workshops. OPWDD considered that it could best achieve its reform goals in the area of employment by setting smaller objectives and taking incremental steps towards such goals. This approach will help providers make a smoother adjustment to all of the changes that are underway as part of OPWDD’s transformation agreement.
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: The emergency rule is effective July 1, 2013. OPWDD has concurrently filed the rule as a Notice of Proposed Rule Making, and it intends to finalize the rule as soon as possible within the time frames mandated by the State Administrative Procedure Act. These amendments do not impose any new requirements with which regulated parties are expected to comply as the amendments only concern reimbursement for services provided. However, OPWDD has notified providers of its employment goals and commitment to stop funding new admissions in sheltered workshops (along with other commitments to CMS) in numerous meetings/conferences, mailings to the field, and in materials posted on its website, so that providers would have sufficient lead time to arrange for different services for individuals who may have otherwise been placed in sheltered workshops. OPWDD also specifically informed all providers of the new emergency/proposed amendments around the time of their effective date.
Regulatory Flexibility Analysis
1. Effect on small business: OPWDD has determined, through a review of the certified cost reports, that most OPWDD-funded 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 95 agencies which operate a total of 126 sheltered workshops and which are required to comply with the emergency/proposed regulations. OPWDD is unable to estimate the portion of these providers that may be considered to be small businesses.
The emergency/proposed amendments have been reviewed by OPWDD in light of their impact on small businesses. These amendments concern the reimbursement of prevocational services delivered in sheltered workshops.
2. Compliance requirements: The emergency/proposed amendments do not impose any additional compliance requirements on providers as the amendments only concern reimbursement for services provided.
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, as the emergency/proposed amendments will not impose any additional compliance requirements on providers.
5. Economic and technological feasibility: The emergency/proposed amendments do not impose the use of any new technological processes on regulated parties.
6. Minimizing adverse impact: The purpose of these emergency/proposed amendments is to prohibit OPWDD funding for new admissions into sheltered workshops, which are considered to be segregated employment settings. Although OPWDD expects that these amendments will be cost neutral as reimbursement is commensurate with costs/expenditures for services provided, there is a possibility that they may result in a minimal adverse impact on small business providers. Individuals who might otherwise have been admitted to a sheltered workshop operated by one provider may choose to receive other pre-employment services from another provider, or may obtain competitive employment. This will result in a loss of revenue to the sheltered workshop provider. However, OPWDD expects that, in these instances, losses acquired by sheltered workshop providers will be offset by gains acquired by other providers/businesses in the community, so that, overall, any adverse impact on regulated parties would be minimal.
OPWDD has reviewed and considered the approaches for minimizing adverse economic impact as suggested in section 202-b(1) of the State Administrative Procedure Act (SAPA). OPWDD could not establish different compliance timetables for small business providers because these amendments are necessary to fulfill a specific commitment to the Centers for Medicare and Medicaid Services (CMS) to no longer fund new admissions to sheltered workshops effective July, 1, 2013. Without these amendments, OPWDD would fail to meet its commitment to CMS and would risk loss of substantial federal funding which could jeopardize the health, safety, and welfare of individuals receiving services in the OPWDD system. Since these amendments require no specific compliance response of regulated parties, the other approaches outlined in SAPA to minimize the adverse impact cannot be effectively applied.
Lastly, OPWDD determined that stopping the funding of new admissions to sheltered workshops would be the most optimal approach in meeting its employment goals for individuals receiving services to obtain competitive employment, and to receive pre-employment services in more integrated settings. OPWDD considered that it could best achieve these goals by setting smaller objectives and taking incremental steps towards such goals. This approach will help providers make a smoother adjustment to all of the changes that are underway as part of OPWDD’s transformation agreement, thereby minimizing any adverse impact on providers.
7. Small business participation: The emergency/proposed regulations were discussed with representatives of providers, including those members of the New York State Association of Community and Residential Agencies (NYSACRA) who have fewer than 100 employees, at numerous meetings and conferences. OPWDD has conveyed its employment goals, including its objective to promulgate these amendments, to providers, at four meetings/conferences in April, six meetings/conferences in May, and four meetings/conferences in June. Further, OPWDD has notified providers of its commitment to stop new admissions in sheltered workshops (along with other commitments to CMS) in materials posted on its website and in mailings to the field, one of which was a mailing of an OPWDD document titled, “OPWDD Employment Transformation: Questions and Answers,” sent out on June 10, 2013. OPWDD also specifically informed all providers of the new emergency/proposed amendments around the time of their effective date.
8. For rules that either establish or modify a violation or penalties associated with a violation: The emergency/proposed amendments do not establish or modify a violation or penalties associated with a violation.
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. 43 counties have a population of 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, Schenectady, Schoharie, Schuyler, Seneca, Steuben, Sullivan, Tioga, Tompkins, Ulster, Warren, Washington, Wayne, Wyoming and Yates. Additionally, 10 counties with certain townships have a population density of 150 persons or less per square mile: Albany, Broome, Dutchess, Erie, Monroe, Niagara, Oneida, Onondaga, Orange, and Saratoga.
The emergency/proposed amendments have been reviewed by OPWDD in light of their impact on rural areas. These amendments concern the reimbursement of prevocational services delivered in sheltered workshops.
2. Compliance requirements: The emergency/proposed amendments do not impose any additional compliance requirements on providers as the amendments only concern reimbursement for services provided.
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 emergency/proposed amendments will not impose any additional compliance requirements on providers or local governments.
5. Minimizing adverse economic impact: The purpose of these emergency/proposed amendments is to prohibit OPWDD funding for new admissions into sheltered workshops, which are considered to be segregated employment settings. Although OPWDD expects that these amendments will be cost neutral as reimbursement is commensurate with costs/expenditures for services provided, there is a possibility that they may result in a minimal adverse impact on providers in rural areas. Individuals who might otherwise have been admitted to a sheltered workshop operated by one provider may choose to receive other pre-employment services from another provider, or may obtain competitive employment. This will result in a loss of revenue to the sheltered workshop provider. However, OPWDD expects that, in these instances, losses acquired by sheltered workshop providers will be offset by gains acquired by other providers in the community, so that, overall, any adverse impact on regulated parties would be minimal.
OPWDD has reviewed and considered the approaches for minimizing adverse economic impact as suggested in section 202-bb(2)(b) of the State Administrative Procedure Act (SAPA). OPWDD could not establish different compliance timetables for providers in rural areas because these amendments are necessary to fulfill a specific commitment to the Centers for Medicare and Medicaid Services (CMS) to no longer fund new admissions to sheltered workshops effective July, 1, 2013. Without these amendments, OPWDD would fail to meet its commitment to CMS and would risk loss of substantial federal funding which could jeopardize the health, safety, and welfare of individuals receiving services in the OPWDD system. Since these amendments require no specific compliance response of regulated parties, the other approaches outlined in SAPA to minimize the adverse impact cannot be effectively applied.
Lastly, OPWDD determined that ceasing OPWDD funding of new admissions to sheltered workshops would be the most optimal approach in meeting its employment goals for individuals receiving services to obtain competitive employment, and to receive pre-employment services in more integrated settings. OPWDD considered that it could best achieve these goals by setting smaller objectives and taking incremental steps towards such goals. This approach will help providers make a smoother adjustment to all of the changes that are underway as part of OPWDD’s transformation agreement, thereby 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, including providers in rural areas such as NYSARC, the NYS Association of Community and Residential Agencies, NYS Catholic Conference, and CP Association of NYS, at numerous meetings and conferences. OPWDD has conveyed its employment goals, including its objective to promulgate these amendments, to providers, at four meetings/conferences in April, six meetings/conferences in May, and four meetings/conferences in June. Further, OPWDD has notified providers of its commitment to stop funding new admissions in sheltered workshops (along with other commitments to CMS) in materials posted on its website and in mailings to the field, one of which was a mailing of an OPWDD document titled, “OPWDD Employment Transformation: Questions and Answers,” sent out on June 10, 2013. OPWDD also specifically informed all providers of the new emergency/proposed amendments around the time of their effective date.
Job Impact Statement
OPWDD is not submitting a Job Impact Statement for this emergency/proposed rulemaking because this rulemaking will not have a substantial adverse impact on jobs or employment opportunities.
The emergency/proposed amendments establish limits on the reimbursement of prevocational services delivered in sheltered workshops. The amendments limit reimbursement of prevocational services delivered in sheltered workshops to only those individuals who were receiving these services before July 1, 2013, thereby prohibiting OPWDD payment for new admissions to sheltered workshops. OPWDD expects that any losses for sheltered workshop providers as a result of situations in which individuals migrate from sheltered workshop providers to other providers of pre-employment services, or to competitive employment, will be offset by gains for other providers of pre-employment services or businesses in the community. Consequently, overall, these amendments will not have a substantial adverse impact on jobs or employment opportunities.
