PDD-29-12-00028-P Changes to HCBS Waiver Hourly Community Habilitation Services

7/18/12 N.Y. St. Reg. PDD-29-12-00028-P

NEW YORK STATE REGISTER

VOLUME XXXIV, ISSUE 29

July 18, 2012

RULE MAKING ACTIVITIES

OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. PDD-29-12-00028-P

Changes to HCBS Waiver Hourly Community Habilitation 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 13.07, 13.09(b) and 16.00

Subject:

Changes to HCBS waiver hourly community habilitation services.

Purpose:

To modify the fee schedule for the clinical oversight component of funding and to provide expectations for clinical oversight.

Text of proposed rule:

Section 635-10.5(ab)(12)(iii) is amended by the addition of a new clause (c) as follows:

(c) The following fees will be effective on October 1, 2012 or the date as of which necessary federal approval is effective, whichever is later:

	CH Direct Support--Fee is hourly per person
	Individual Serving 1	Group Serving 2	Group Serving 3	Group Serving 4
Region I	$37.05	$23.16	$18.53	$16.21
Region II	$38.39	$23.99	$19.20	$16.80
Region III	$37.51	$23.44	$18.76	$16.41

Section 635-10.5(ab) is amended by the addition of a new paragraph (15) as follows:

(15) Use of Funds.

(i) Effective October 1, 2012 providers of CH services must ensure that at least 90% of the Medicaid revenue billed and received for the provision of CH services, including administration, is used to fund the direct support of individuals within the CH program. Any Medicaid revenue below such 90% not spent on CH services is subject to recoupment.

(ii) Effective January 1, 2014 providers of CH services must ensure that at least 95% of the Medicaid revenue billed and received for the provision of CH services, including administration, is used to fund the direct support of individuals within the CH program. Any Medicaid revenue below such 95% not spent on CH services is subject to recoupment.

(iii) The fees contain funding for clinical oversight. Clinical oversight includes the training and mentoring of direct support staff on diagnostic issues, care plan/habilitation plan issues and behavior management issues, as well as the troubleshooting of any plan issues discovered during plan reviews. Effective October 1, 2012, clinicians must document discussions with direct support staff and include that documentation as supplemental clinical notes in individuals' files at least annually. The documentation requirement will be applicable for any twelve month period in which an individual is enrolled in CH for the entire twelve month period and has received any CH service during that period.

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

Barbara Brundage, Director, Regulatory Affairs Unit, Office for People With Developmental Disabilities (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, 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. 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 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).

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.

2. Legislative Objectives: These proposed amendments further the legislative objectives embodied in sections 13.07, 13.09(b) and 16.00 of the Mental Hygiene Law. The proposed amendments are concerning adjustments to the reimbursement methodology applicable to Home and Community Based Services (HCBS) waiver Community Habilitation (CH) services and requirements pertaining to the provision of clinical oversight of these services.

3. Needs and Benefits: OPWDD is proposing these regulations to promote accountability and quality in CH services. The proposed amendments amend regulations governing CH services to reduce the clinical oversight component of the funding to be in line with actual costs of providing clinical oversight, enhance accountability in the provision of clinical oversight, and identify the minimum percentage of Medicaid revenue received that must be expended on the direct support of individuals receiving CH.

The current CH services fee schedule will be reduced by 3.5 to 4.5 percent for all providers. This decrease is associated with a reduction in the clinical oversight component of the fees. It has been three years since the implementation of the current reimbursement methodology; OPWDD has performed programmatic and fiscal reviews to see if identified program/fiscal goals were achieved. The program review was accomplished through a survey of individuals, families and providers of service. The program findings revealed that eighty-five percent of individuals were pleased with the quality of services delivered. The primary fiscal finding was that the February 1, 2009 regional fees were constructed with clinical oversight components at too high a level. Therefore, the clinical oversight component of the CH fee is being reduced in accordance with fiscal review results.

The proposed amendments add requirements to enhance accountability of the clinical oversight provided in the CH program. Clinical oversight includes training and mentoring of direct support staff on diagnostic issues, care plan/habilitation plan issues and behavior management issues, as well as the troubleshooting of any plan issues discovered during plan reviews. OPWDD considers that identifying components of clinical oversight will provide clarity to providers regarding the expectations for clinical oversight and will improve the consistency and quality of CH services. The amendments also require that clinicians must document discussions with direct support staff and include such documentation as supplemental clinical notes in individuals' files at least annually. This will enhance accountability and increase transparency in service delivery.

The proposed amendments also limit Medicaid revenue interchange by identifying the minimum percentage of CH program Medicaid revenue that must be used to fund the direct support of individuals within the CH program. That percentage will be 90 percent at October 1, 2012 and 95 percent at January 1, 2014. Any Medicaid revenue below the specified percentages that is not spent on CH services is subject to recoupment. These changes reflect OPWDD's commitment to achieving greater resource accountability and to supporting individuals in the most integrated setting.

4. Costs:

a. Costs to the agency and to the State and its local governments: There is an approximate $6.1 million savings in Medicaid resulting from the reduction in the CH fees that will be evenly shared by the State (approximately $3.05 million) and the federal (approximately $3.05 million) 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. The 3.5 to 4.5 percent reduction in the reimbursement fees are expected to result in a decrease of approximately $6.1 million in aggregate funding to providers of CH services. OPWDD expects that providers that may be expending Medicaid funds used for direct support to individuals in the CH program at levels below the required percentage of Medicaid revenues will increase the necessary expenditures in the CH program and thereby avoid OPWDD recoupment of Medicaid funds. Therefore, OPWDD does not expect providers to experience any loss of Medicaid revenue as a result of this provision. There may be costs that are incurred by providers to comply with the new requirement for documentation of clinical oversight. However, the additional documentation will likely be performed by existing staff and any costs incurred will be minimal.

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 will result in additional paperwork to be completed by providers. Clinicians must document discussions with direct support staff and include that documentation as supplemental clinical notes in individuals' files at least annually. However, providers may opt to use electronic recordkeeping systems to comply with this requirement, which may reduce the amount of additional paperwork necessary to comply with this requirement. OPWDD considers that the additional paperwork is warranted as it will improve the quality of CH services and assist OPWDD in monitoring the quality of CH 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: There were no significant alternatives to these regulations that were considered by OPWDD. In developing this regulatory proposal, OPWDD consulted with representatives of provider associations to achieve OPWDD's desired goals for improving the quality of CH services and increasing accountability in service delivery. OPWDD determined that the changes to the reimbursement methodology proposed in this amendment, in concert with the addition of OPWDD's expectations for clinical oversight and the limitations on the use of Medicaid funds, is the most optimal approach in accomplishing its goals, 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 regulations effective October 1, 2012. OPWDD will notify providers of its intention to promulgate the regulations when the regulations are proposed, which is adequate lead time for providers to make the changes needed to document the clinical oversight provided and to adjust expenditures in the CH program to meet the required minimum percentage of Medicaid revenue. In addition, the proposed limits on interchange will be phased in, so that percentage of Medicaid revenue that must be spent on services will be 90% for fifteen months, with the full requirement that providers expend 95% of Medicaid revenue on services not taking effect until January 1, 2014.

Regulatory Flexibility Analysis

1. Effect on small business: The OPWDD has determined, through a review of the certified cost reports, that most Home and Community Based Services (HCBS) waiver community habilitation 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 258 agencies that provide community habilitation services and would be impacted 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 6.1 million dollars in funding to providers of HCBS community habilitation services. OPWDD has determined that these amendments impose minimal increased compliance requirements.

2. Compliance requirements: The proposed amendments impose minimal additional recordkeeping and compliance requirements on providers. Clinicians must document discussions with direct support staff and include that documentation as supplemental clinical notes in individuals' files at least annually. Providers may opt to use electronic recordkeeping systems to comply with this requirement, which will allow providers to perform this task in an efficient manner and may minimize compliance activities. In addition, providers will have to spend a certain percentage of their Medicaid revenue on the direct support of individuals receiving community habilitation.

The amendments will have no effect on local governments.

3. Professional services: There may be minimal additional professional services, if any, required as a result of the new requirement for annual documentation of clinical oversight. OPWDD anticipates that the increased work to comply with the annual documentation requirement will be nominal and therefore, this work will likely be added to the responsibilities of existing staff. The amendments will not add to the professional service needs of local governments.

4. Compliance costs: There may be costs that are incurred by providers to comply with the new requirement for annual documentation of clinical oversight. However, the additional documentation will be likely be performed by existing staff so any costs incurred should be minimal. Providers may need to alter their spending to comply with the requirement to spend a percentage of Medicaid revenue on direct support of individuals. However, since community habilitation is paid on an hourly basis, this requirement will affect providers equally, whether they have a large or small volume of community habilitation billing.

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 modify the methodology for the clinical oversight component of the hourly CH fee in order to promote accountability and quality in CH services. OPWDD has determined that it could adjust fees for HCBS waiver community habilitation services to be in line with actual costs expended on the services. The proposed amendments represent OPWDD's best effort at adjusting reimbursement in a way which will promote accountability and quality of the CH service.

OPWDD considered the approaches for minimizing adverse economic impact as suggested in section 202-b(1) of the State Administrative Procedure Act. To follow these approaches would mean allowing small business providers to spend a smaller percentage of their revenue on services, allowing small business providers to have less clinical oversight and documentation of that oversight, allowing small business providers more time to reach the 90% or 95% goal for revenue spent on services and more time to meet the clinical oversight requirements, or exempting small business providers from the regulations altogether. However, because clinical oversight and proper expenditures of Medicaid revenue are important in this service, and because individuals should receive the same quality of service whether they get the service from a big provider or a small provider, OPWDD is not varying the requirements for small businesses.

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 April 23, May 14, May 31, June 11, June 18, and June 25, 2012. 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.

8. (If applicable) For rules that either establish or modify a violation or penalties associated with a violation: The 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 proposed amendments have been reviewed by OPWDD in light of their impact on rural areas. The proposed amendments are expected to result in a decrease of approximately 6.1 million dollars in funding to providers of HCBS community habilitation services. The geographic location of any given program (urban or rural) will not be a contributing factor to any additional costs to providers. OPWDD has determined that these amendments impose minimal increased compliance requirements.

2. Compliance requirements: The proposed amendments impose minimal additional recordkeeping and compliance requirements on providers. Clinicians must document discussions with direct support staff and include that documentation as supplemental clinical notes in individuals' files at least annually. Providers may opt to use electronic recordkeeping systems to comply with this requirement, which will allow providers to perform this task in an efficient manner and may minimize compliance activities. In addition, providers will have to spend a certain percentage of their Medicaid revenue on the direct support of individuals receiving community habilitation.

The amendments will have no effect on local governments.

3. Professional services: There may be minimal additional professional services, if any, required as a result of the new requirement for annual documentation of clinical oversight. OPWDD anticipates that the increased work to comply with the annual documentation requirement will be nominal and therefore, this work will likely be added to the responsibilities of existing staff. The amendments will not add to the professional service needs of local governments.

4. Compliance costs: There may be costs that are incurred by providers to comply with the new requirement for annual documentation of clinical oversight. However, the additional documentation will be likely be performed by existing staff so any costs incurred should be minimal. Providers may need to alter their spending to comply with the requirement to spend a percentage of Medicaid revenue on direct support of individuals.

5. Minimizing adverse impact: The purpose of these proposed amendments is to modify the methodology for the clinical oversight component of the hourly CH services fee in order to promote accountability and quality in CH services. OPWDD has determined that it could adjust fees for HCBS waiver community habilitation services to be in line with actual costs expended on the services. The proposed amendments represent OPWDD's best effort at adjusting reimbursement in a way which will promote accountability and quality of the CH service.

OPWDD considered the approaches for minimizing adverse economic impact as suggested in section 202-bb(2)(b) of the State Administrative Procedure Act. . To follow these approaches would mean allowing rural providers to spend a smaller percentage of their revenue on services, allowing rural providers to have less clinical oversight and documentation of that oversight, allowing rural providers more time to reach the 90% or 95% goal for revenue spent on services and more time to meet the clinical oversight requirements, or exempting rural providers from the regulations altogether. However, because clinical oversight and proper expenditures of Medicaid revenue are important in this service, and because individuals should receive the same quality of service no matter where in the State they live, OPWDD is not varying the requirements rural providers.

6. Participation of public and private interests in rural areas:

The proposed regulations were discussed with representatives of providers, including NYSARC, the NYS Association of Community and Residential Agencies, NYS Catholic Conference, and CP Association of NYS, which represent providers in rural areas, on April 23, May 14, May 31, June 11, June 18, and June 25, 2012. Finally, OWPDD will be mailing these proposed amendments to all providers, including providers in rural areas.

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 adverse impact on jobs and/or employment opportunities.

The proposed amendments will reduce the clinical oversight component of CH funding to be in line with actual costs of providing clinical oversight. Since the changes will not reduce the clinical oversight component of the fees below anticipated costs, the amendments will not cause CH providers to eliminate jobs or employment opportunities.

The proposed amendments also add requirements for clinical oversight and require a percentage of CH program revenue to be used to fund the direct support of individuals within the CH program. By ensuring that providers spend revenue on service provision and clinical oversight, these changes will only serve to preserve jobs and employment opportunities, rather than to decrease them.