Ten Issues to Consider When Implementing Individual or Level-Based Budget Allocations

1. Ten Issues to Consider When Implementing Individual or Level-Based Budget Allocations North Dakota May 2011 Jon Fortune of HSRI Jon Fortune, John Agosta, Kerri Melda, & Drew Smith Human Services Research Institute 7420 SW Bridgeport Road (#210) Portland, OR 97224 503-924-3783 jfortune@hsri.org jagosta@hsri.org

2. Today’s Topics… • The Big Picture • What are we trying to do overall? • Potential Challenges in ND • Key issues policy makers face as they focus on developing more efficient & equitable individually tailored resource allocation models • Assessment tools like the Supports Intensity Scale (SIS) and why they are being used and what is being discovered • The strategic planning process we use • Your questions? Human Services Research Institute

3. The Big Picture… What are we trying to do? • We are tying to establish a way to allocate resources so that people get what they need, no more and no less. • This means that people with the least needs are allocated the least amount. Those with greater needs get more. • To develop a system like this, we need good information on the people served and their need for support, an understanding of what different services cost, and a good way to track spending. • This requires policy makers to settle on the types of services that should be offered, what they are willing to pay for these services, and what outcomes are expected. Human Services Research Institute

4. A Lot We want to move from a low correlation like THIS… $ $ Little Little Little A Lot Little A Lot Support Needed A lot Support Needed …to a high correlation like THIS Human Services Research Institute

5. What is your financial architecture for ID service systems? Human Services Research Institute

6. Where are you& where are you going? Human Services Research Institute

7. Illinois Blueprint & Gap Analysis In Support of Sustainable Future: Responding to Needs in New Jersey Where Does NC Stand? Texas Gap Analysis Florida Strategic Plan Forward Human Services Research Institute

8. What supports do people need? • What is the service array that individuals need and prefer? • What is being paid for services and supports? • What outcomes for people are sought? • What are the desired social roles and responsibilities? • Is the current overarching service model appropriate? Human Services Research Institute

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10. Database Invaluable • Information about people served and service use is needed

11. Do you know the number of people served, where they are, their services, rate schedules, related expenditures in relationship to their support needs? Human Services Research Institute

12. Can you bring the two together?Low correlation High correlation Human Services Research Institute

13. What if service definitions and service expenditure data were developed? Examine desired service package for people related to their support needs. Human Services Research Institute

14. Issue 1. What Goals Are Important? Think of the Challenges Faced By Policy Makers… • Budget stress • Accelerating service demand and waiting lists • Reliance on legacy and inefficient systems • Workforce shortages • Continued push for community integration, participation, contribution…self-direction. Decisions Made Future System Human Services Research Institute

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16. Reliance on Legacy Systems… It’s A Living Museum ... Can this be efficient? Sheltered Work Customized Employment Day Habilitation Group Homes IEP, ISP, IHP, IWRP, IFSP, IPP Family Support Token Economies Apartments Public Institutions Supported Living Supported Work ICFs-MR Self-determination 1956... 1962... 1972 ... !976...1983... 1987.. .1992... 1997.. 2000... 2003…2006…2009 Human Services Research Institute

17. There is a wide range of DD waiver expenditures among states (Lakin 2008): Year Least to Most Avg. Annual 1997 1 to 5x $27,780 2000 1 to 16x $33,113 2002 1 to 9x $35,707 2009 1 to 5x $43,395 Human Services Research Institute

18. What percentage of their waiver budget in FY10 did the 5% most expensive people require? WI HI 18% WY 15% VT, MI 14% NM, DC, NH 13% GA 10% Human Services Research Institute

19. Increasing Service Demand Wait List States Face a Big Problem… Resources Gary Smith, HSRI Human Services Research Institute

20. Waiting for Residential Services People with ID/DD on a waiting List for, but not receiving, residential services on June 30, 2008 HSRI finds states with 300 people served by waivers per 100,000 citizens have minimal or no waiting lists Lakin, Larson, Salmi, & Scott (eds.) (2009). Residential Services for People with Developmental Disabilities: Status and Trends Though 2008 Human Services Research Institute

21. Potential Policy Goals Issue 1. What Goals Are Important? • Fairness, equitability, explicability • Increase efficiency to address increasing demand • Matching resources and individual needs • Ability to handle exceptional care • In a time of limited resources - focus on those with greatest need • Inject self-directed approaches Human Services Research Institute

22. Heading for a Crash! Weighty Legacy Services & Structures Budget Shortfalls Rising Unmet Demand Workforce Shortages Fragmentation Quality Problems Antiquated Technologies Human Services Research Institute

23. What To Do? We can’t stay on this spot We need to rethink what we do – affirm our values but resolutely search for “value” Human Services Research Institute

24. We Must Make Our ServiceSystems More Efficient & Equitable • Reform our person-centered system architecture • Disinvest from low value/high cost services • Utilize Medicaid Efficiently! • New business models… Open markets • “Non-traditional” providers/direct purchase of supports Human Services Research Institute

25. State DD Directors Have Taken Some First Steps • Fewer than 35,000 individuals are living in institutions; by 2010, 10 states have no institutions costing $60,999 (avg in 2008 ) • Residential options are getting smaller with 14 states having 90% of individuals in 6 person or smaller settings costing $51,179 (avg in 2008 ), • ICF-MR/DDs are “out”; Waiver services are “in” • States are investing in “in-home supports” through supports waivers • States are looking at how to allocate resources to individuals Human Services Research Institute

26. Efficiency & Equity Efficiency gains come from understanding exactly what it costs to provide a service at a given level of quality for a particular type of person. Most state developmental disability agencies, however, know little about per person actual costs. Equity requires understanding what supports individuals need, and a fair allocation of resources to address personal needs. Few systems have assessment processes that translate directly into resource allocations. Over time decisions made about expenditures often appear idiosyncratic and unfair. Human Services Research Institute

27. The idea is to nudge a system down the incline to reduce per person expenditures. Big House State Op ICF-MRs  CommunityICF-MRs Highest Cost HCBS WaiversComprehensive & Specialty Waivers Supports Waivers An Overall Look at Things State Funded Services Lowest Cost About 4% more per year DEMAND People with Developmental Disabilities(1% of the population) Human Services Research Institute

28. The ETERNAL QUESTION: How do we deliver what we have to the people who needit most ? Robert T. Clabby, II Oregon Human Services Research Institute

29. The idea is for… people to get what they need, no more and no less. • Generally, allocations in a system will show that the greatest number of people require less support, and so should receive fewer resources per person. There should be fewer individuals with extraordinarily high allocations. • Sometimes, systems become disordered and the pattern shows great numbers of people receiving high allocations. Most people… and MOST expensive Fewest people… and MOST expensive Moving a system from left to right… Fewest people… and LEAST expensive Most people… and LEAST expensive Human Services Research institute

30. Don’t forget: Stakeholder Involvement • A stakeholder group should be formed: • To help advise the process • To assure that people know what the process is finding and what decisions are being made. The stakeholder group should meet regularly and be composed of self-advocates, parents, providers, and others. Human Services Research Institute

31. Issue 2. How does a state choose a tool to measure support needs? Things to Consider when Choosing an Assessment Tool • Assessment tools provide information about support needs • States use various tools to tie funding to support needs • Each tool has its pros and cons Human Services Research Institute

32. Why do states pick the Supports Intensity Scale? • National norms – buying the bell shaped curve • Writing waiver service plans with individuals, families, and providers • Captures support needs hence some of the natural supports used by individuals • Considers both behavioral and medical challenges • Has potential for helping to shape waiver individual budgets and/or reimbursement levels Human Services Research Institute

33. What is the SIS? The Supports Intensity Scale (SIS) and how it is being used • Developed and released by AAIDD in 2004 • Originally designed to support person-centered planning, not funding • Only adult version available – child version is under development • Currently 14 states and 14 countries using SIS • Perceived as strength-based • Must be purchased/licensed from AAIDD Human Services Research Institute

34. Supports Intensity Scale • Administration: Interview the person and others who know the person. Requires solid interviewing skills • Measures general support needs of an individual producing a number of scores • Includes basic support need areas like: • A. Home Living Activities, • B. Community Living Activities, and • E. Health and Safety Activities • SIS ABE – refers to the sum of the scores for these 3 areas that have been found useful in helping resource allocation • Identifies Medical and Behavior problems which are also significant cost predictors Human Services Research Institute

35. SIS and State Funding Models • Georgia – is using the SIS to develop individual budget allocations for 11,522 people since October 2008 for their new support and comprehensive waivers • Washington: linking SIS and other information to levels of payments and amounts of support services and is expanding from residential to include employment • Louisiana: informally using a SIS-informed funding system with 2,013 new NOW waiver applicants beginning in January 2009 • Hawaii, Rhode Island, Maryland, Missouri, New Jersey, New Mexico, New Hampshire, North Carolina, Virginia, and Utah are exploring SIS applications for resource allocation • Oregon and Colorado are using SIS to inform their waiver reimbursement models • Alberta, Canada is rolling out a three year SIS resource allocation initiative Human Services Research Institute

36. “Buying the Bell Shaped Curve” Human Services Research Institute

37. Most Comprehensive Waiver or Expensive other state service options Supports Waiver Services including capped allocations and defined service array B ase level of state funded service options that do not include Medicaid Lea s t Expensive HCBS Waivers Working Together Human Services Research Institute

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39. Comprehensive HCBS Waiver SIS Results – Similar Shapes Colorado Oregon Virginia Georgia Missouri Rhode Island Human Services Research Institute

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41. HCBS Support WaiversSIS Results – Similar Shapes Colorado SLS Georgia NOW Louisiana NOW Missouri Community. SIS Support Needs Index Scores Human Services Research Institute

42. Issue 3. Full Population or Random Pilot Sample? ½ like it all & ½ like it small • Full population or random pilot sample? • A good database is invaluable… whether a pilot is used or everyone • Many factors explain variance • All the predictors work together as a team • The techniques are often powerful enough to be able to overcome minor error and work well • Allocations and plans are based on the “FOUR Ps”… Personal, portable, prioritized, predictable Human Services Research Institute

43. HCBS waiver reimbursement is not rocket science. It is a lot harder. Gary Smith Human Services Research Institute

44. HSRI is designing the financial architecture for DD/ID service systems Human Services Research Institute

45. Overview of the Strategic Planning Process Developing Individual Budgets In Relation to Service Payment Rates Assign Individuals to Assessment Levels Review Findings in Relation to Policy Goals Collect Information on Individuals Collect Data  Consider Implementation Issues Set Policy Goals Set Individual Budget Allocations in Relation to Rates Compile the Collected Information Plan for Implementation Engage Stakeholders Choose Assessment Measure Set Levels & IBAs   Prepare Implement  Implement New Practices Review Provider Reimbursement Reconcile Levels and Rates Human Services Research Institute

46. Issue 4. What cost/expenditure data are states using to build IBAs and Adjust Rates • Do we really know what it costs to serve a person? • Why are some people allocated more that others, even though they have similar needs? • Is the way we allocate funds fair? Is it based on support needs? • Is this efficient? • Several states are working to assess needs systematically and allocate accordingly Person-Centered Budget Allocations Adjusted Service Reimbursement Rates Human Services Research Institute

47. Several steps in the process Issue 4. What cost/expenditure data are states using to build IBAs and Adjust Rates • Determine what variables correlate highest with expenditures; • Given analysis of support needs and the support they receive … • Individuals are assigned to an “Level Budget Allocation ” • -- OR -- • Individuals are given their own unique “Individual Budget Allocation;” • A “best fit model” is built to align individuals and their needs with budget allocations; • These findings are reconciled with the rates associated with payments to service providers. Human Services Research Institute

48. Issue 4. What cost/expenditure data are states using to build IBAs and Adjust Rates SIS Results LBAs IBAs SIS Results Individual Budget Levels IndividualBudgets Budget Allocations Per Level ReconcileBudgets & Rates ReconcileBudgets & Rates Alignment Proposed New Rate Structure Proposed New Rate Structure Cost Reviews Per Person and Service Cost Reviews Per Person and Service Human Services Research Institute

49. Essential Secret Step: Setting Individual Budget Allocations and Adjusting Rates Human Services Research Institute

50. Defining Individual Budget Allocations • Given that the field is moving toward individualized budgets, it is essential for policy makers to be precise in what is meant by an “individual budget allocation” (IBA). • Dollar amount tied to needs, total budget • Individual decides how to use the full amount • New budget is prospective rather than retrospective Human Services Research Institute