State proposes changes to program for those with developmental disabilities

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The New York State Office for People With Developmental Disabilities (OPWDD) is proposing amendments to the Home and Community Based Services Waiver that could affect reimbursements, among other things.

The HCBS Waiver is a program operated by OPWDD and administered by the state Department of Health. The program allows people with developmental disabilities to live in the community as an alternative to intermediate care facilities.

“We hear ‘waiver’ and we say, what’s a ‘waiver’?” said Barclay Damon LLP partner James Grossman. “It’s really just a contract between the state and federal government, because the federal government pays a lot of the funding. It’s funded through the Centers for Medicare and Medicaid Services.”

The waiver, or contract, is subject to CMS’ provider reimbursement manual, also referred to as HIM-15, which covers a multitude of areas that range from research costs and bad debts to owner compensation and costs related to patient care. HIM-15 requires that the state reimburse agencies the “reasonable actual cost” of the services they provide, Grossman noted.

“That makes sense. Rates are set by the state based upon a cost report that says how much does it cost an agency to run programs,” he explained. “By the way, 20 percent of the state is exempt from all of this. Those are all the state-run agencies that are run at about two to three-times the cost of the private agencies. Only the private agencies and not-for-profits (are subjected to HIM-15). The rates are set so that when you provide the services you receive the money for the services you provided, and when you do, it should cover your cost.”

In response to the COVID-19 pandemic, the state obtained flexibility from CMS to make two amendments to the state’s HCBS Waiver. As part of the amendments, the state is proposing a number of programmatic and technical changes.

New York state has proposed the removal of the requirement that the care manager and regional office representative sign the “documentation of choices” form in order to expedite the review process. The form still will require the signature of the individual or the individual’s advocate.

Additionally, the OPWDD said that, while still required to be filled out, the care coordination organization (CCO) consent form will no longer be used as part of the life plan review. The OPWDD said neither of the documentation changes will have an impact on the individual services recipient.

The waiver amendment also suggests that all HCBS Waiver services be authorized by OPWDD Developmental Disability Regional Offices via clinical review. The proposal intends to promote consistent, efficient and fair decision-making across all offices statewide.

In terms of fiscal updates and changes, the OPWDD noted that prior to the pandemic, certain state agencies were expected to take action to save money on provider rates. Identified for review was the reimbursement made to providers for days when individuals do not receive residential habilitation services. Proposed changes to the waiver include the occupancy adjustment, retainer days, therapeutic leave days and vacancy days.

The OPWDD said that beginning Oct. 1, reimbursement will be set at 50 percent for times in which the individual receiving services is in another facility such as a hospital or nursing home. Additionally, supervised residential habilitation providers will be limited to 96 therapy days per year per person and will be reimbursed at 50 percent of their established rate. Therapy days are weekends or vacation time when an individual is not in the habilitation facility.

The problem with that, Grossman said, is that the staff in many instances must be retained during that time, and often the staff visits the individual in the hospital or nursing home even though they’re not required to do so.

“What they’re doing now is saying we’re only going to pay 50 percent of your rate to maintain your staff, to maintain everything, but we’re going to cut it off, too,” Grossman explained. “We’re going to limit those days that if someone’s in the hospital we’ll pay you for.”

Grossman called the amendments a “cash grab” by the state aimed at private and nonprofit habilitation facilities.

“Everything is to make sure that they don’t pay you your reasonable actual cost,” he said. “It’s just a way to save money. That’s the primary thing that these amendments are trying to do.”

Grossman noted that staff members at the facilities are subject to high scrutiny because they are caring for the most vulnerable people in our society, yet they often are paid minimum wage and less than workers in industries with less scrutiny.

“None of these things apply to those 20 percent state-run (facilities) because there they’re not subject to those limitations,” Grossman added. “So you’ll see two ads for the same exact direct support person and one is paying twice as much as the other, with state benefits.”

With recommendations in place, a public comment period is open through July 1. Once comments have been reviewed and any necessary adjustments incorporated, New York state will submit the amended waiver to CMS for approval.

A copy of the waiver amendment is available for review on the OPWDD website at: https://opwdd.ny.gov/providers/home-and-community-based-services-waiver.

“This is just more and more looking at the most vulnerable populations and saying it’s not a big voting block and we’re going to go after them and cut the funding,” Grossman said. “Now, why do they do that? They do that because the idea right now is to try to get rid of the small agencies. It’s more efficient to run six big agencies around the state.

“If I enter into a contract with you to do something and you need to hire staff, rent a building, buy equipment and we’ve priced it and said this is what the cost is going to be, and then after the fact I say, by the way, we’re not going to pay you that cost, we’re going to pay you 85 percent of that cost, that means you have a 15 percent loss,” Grossman said by way of analogy. “There’s a problem. And that’s the way this system is working. And that’s what these amendments now propose.”

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