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The Bush Administration, in almost eight years in power, has tried to “reign in” or more accurately achieve drastic cuts in entitlement and other government spending in all areas that greatly impact on individual with disabilities and other vulnerable citizens. Now as the administration’s final year winds down, it is seeking to accomplish through regulatory reform, what it could not achieve through legislation, cutting the cost of the Medicaid program in particular. Developmental disability advocates have historically viewed legislation as the primary vehicle for defending and advancing the interests of individuals with disabilities. However, regulatory reform, a backdoor approach to cost cutting and control, an approach that receives less attention from advocates because it is not as transparent, has been used by this administration to harm the interests of our community, as well as other communities that rely on government programs.

The Medicaid program, a $346 billion federal and state program, has been a huge thorn in the side of the Bush administration, as well as Republican controlled Congress under former President Clinton.  This administration has tried time and again to limit program eligibility and reimbursement to Medicaid recipients alleging that they would save billions of dollars by curbing what they call abuse and requiring states to pick up a larger portion of costs. The following are several examples of their attempts at regulatory reform.

The “Rehab Option” Regulation:
In August of 2007 the Centers for Medicare and Medicaid Services (CMS) published a notice of proposed rulemaking (NPRM) that would amend the definition of rehabilitation services to prohibit payment for habilitation services, thereby prohibiting people with “mental retardation and related conditions” from receiving any services through the Medicaid Rehab Option, services that have been part of Medicaid offerings in almost twenty states since 1989. New York State, with a Medicaid program that has historically funded critical day habilitation services in the community, would have been very hard hit by this new regulation. 

After months of work by advocates, On December 29th, President Bush signed into law the Medicare, Medicaid and SCHIP Extension Act of 2007. This bill included a 6 month moratorium or delay (until June 30. 2008) on certain administrative actions that would restrict the covering of habilitation services.

The School Based Administrative and Transportation Costs Regulation:
Additionally covered by this December 29^th moratorium was another Medicaid regulation that the administration set forth in its September 7^th NPRM that would have restricted schools from being reimbursed for certain administrative and transportation costs for students with disabilities. This rule, known as the “administrative claiming” rule, was also covered under the moratorium of the December 29^th law and therefore cannot go into effect before July 1, 2008.

Targeted Case Management Regulations:
Further cutting away at Medicaid through CMS regulations that cut Targeted Case Management (TCM) is the Bush administration’s newest attempt to by-pass the authority of Congress and the intent of the law. The proposed regulations will cut Medicaid funding for case management services that assist Medicaid-eligible children and adults with disabilities to access essential long term supports, social, medical, educational and other services. The administration has claimed that these regulations are required to implement provisions of the Deficit Reduction Act passed two years ago. However, critics seem to feel that they go above and beyond. This regulation will go into effect on March 3, 2008 unless legislation that has just been proposed to temporarily delay implementation of this Medicaid rule until April 2009 is passed.

The passage of the December 29^th moratorium and the proposed moratorium to delay the TCM regulation described above are clearly short-term or stop-gap attempts to delay the dismantling of the Medicaid program. The moratorium in general gives Congress a bit of time to review the regulations closely and propose needed revisions through legislation before the regulation in question goes into effect. In the case of the rehab option and the school based administration and transportation costs, Congress has only until the end of June.

Disability advocates must find strategies to deal with the issue growing Medicaid costs as it does not appear to be an issue that will disappear, even if there is a new and perhaps more Medicaid friendly administration in the White House.

2. The Direct Support Professionals Fairness and Security Act (H.R. 1279)

The Direct Support Professionals Fairness and Security Act, a bi-partisan bill, was introduced to Congress last year in the hopes of securing federal funds to states to increase the low salaries of many direct support staff (DSP). The bill was unfortunately not passed then but advocates in Washington are asking states to actively enlist House co-sponsors with the hope of getting the bill passed prior to the 2008 elections.

Across the country the wages of direct support professionals has stayed at an average of $9 an hour and staff turnover is great. As a result, the quality of care to individuals with developmental disabilities, who rely on direct support professionals, has deteriorated. The situation has reached crisis proportions. Thanks to the work of advocates many federal legislators began to recognize that the only solution to recruiting and retaining a stable, quality workforce, was to raise salaries.

This bill if passed would provide five years of supplementary Medicaid funding for higher salaries and benefits for targeted direct support professionals. States would choose whether they wished to participate in this program. Those who were to participate would commit to maintaining the wage increase after the first five years and to providing additional increases thereafter.

Once sufficient House co-sponsors have signed on, work will have to proceed on finding Senate sponsors.
 

1.  The Governor’s State of the State and Individuals with Developmental Disabilities

The annual State of the State address by Governor Spitzer in early January made no mention of any group with disabilities. The focus of his address was on economic development, property taxes, health care and education where for example, he recommended a cap on property taxes, a $4 billion endowment for higher education, an expansion of the State Children’s Health Insurance Program, and $1 billion to revitalize the upstate economy. The Governor did not speak about the close to $5 billion and growing budget deficit in the state although he did reportedly call on several state agencies to make further budget cuts than originally planned.

The State of the State address was accompanied by a “2007 Report to the People” a document that gives an overview of all state agencies including OMRDD. The document lists the primary policy challenges facing OMRDD to be ensuring that the system is effectively responsive to emerging needs, a shifting fiscal environment and changing expectations for service delivery.  The Report can be accessed at http://www.ny.gov/governor/press/2007ReportToThePeople.pdf.

2.  Governor Presents 2008-09 Budget to the Legislature

On January 22^nd, Governor Spitzer presented his budget to the legislature. In the OMRDD budget the only reduction proposed -- although quite a significant reduction -- is a multi-year effort to “restructure and rationalize” rates to voluntary providers, such as AHRC. The focus is on ICF’s with fewer than 31 beds, Day Habilitation, and administrative reimbursement in all rate/price/fee based programs including Individual Residential Alternatives (IRA’s). This proposal will cut rates by $10 million in the coming fiscal year (because it is the last quarter of the fiscal year) and $40 million in funding year 09-10.  

These are very significant cuts that will be especially harmful to staff recruitment and retention efforts, as well as the administrative efforts necessary for compliance with Medicaid’s unfunded requirements, mandates that are currently under tremendous scrutiny by state and federal auditors looking for non-compliance or alleged abuse in the effort to take back funds.. Providers and advocates are strongly urging the Legislature to restore these dollars to the Governor’s budget and avoid the proposed cuts. 

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3.  Burden of Proof Legislation Passed –Justice in New York State Special Education Program

In August 2007, Governor Spitzer signed legislation to place the burden of proof in special education hearings back to school districts, the party that had been responsible for the burden of proof until the Schaffer v Weast, US Supreme Court decision last year. Schaffer v Weast placed the burden of proof on parents.  The new legislation restores the longstanding New York State policy that helps to level the playing field between school districts with tremendous resources and families who generally have few resources. The Supreme Court decision would have forced many parents to hire a lawyer to defend their child’s right to an appropriate public education. Many advocates, especially those advocating for those with limited means, strongly criticized the Schaffer decision as creating a system that gives rights only to those who can afford them.

AHRC New York City’s advocate, Christopher Treiber, was instrumental in providing the information that prompted the legislation. Thousands of parents and family members provided feedback to the Governor to support the legislation. Governor Spitzer’s decision has hopefully set an example that will be followed by other states in their attempt to remedy the Schaffer decision.