State Resource Allocation Strategies and Challenges

1. State Resource Allocation Strategies and Challenges Charles Moseley Ed.D, National Association of State Directors of Developmental Disabilities Services January 14, 2008 for Maryland Developmental Disabilities Administration

2. Purpose and Intent What do you want from your resource allocation / rate setting system? • Improve ability to cover costs • Implement uniform service payments • Improve equity and fairness • Address regional or historic inequities • Link allocation amounts to service needs and the assessment process • Support individualized budgeting

3. The Resource Allocation System should… • Achieve state policy goals • Individual needs • Program / service direction and change • Provider capacity • Align reimbursements with individual support needs, provider costs • Be consistent and predictable • Contain costs, document outcomes & promote sound fiscal management • Achieve stability: minimize rate creep & cost escalation

4. Reflect actual provider costs: services, management, operating, administration and overhead Identify cost per units of service and by Service type, scope, frequency & duration Reflect individual need Individualized needs assessment Person-centered planning Provide a framework for individual budgeting Do No Harm And…

5. Individual Budgeting Decision Framework • Who will be served? • Eligibility • Funding priorities • What services will be provided? • Identification of needs • Selection of supports • Service scope, limits and caps • How much will be paid? • Assigning costs • Limits and caps • Establish funding methodology

6. Resource Allocation Strategies Approach & Design Assessment Tools State’s Models

7. Approach Linking resource allocation amounts to individual need • Individualized waiver services led to shifts in provider reimbursement methodologies • Move from categorical, fee-for-service, program specific models to payments based on individuals’ needs • State strategies differ • Developed uniform statewide systems for resource allocation

8. Needs Based Allocation Strategies Two basic approaches: • Prospective - Statistical • Retrospective – Developmental • Mixed

9. Prospective and Retrospective Budgeting Approaches Person Enters System Service Needs Assessment Prospective Retrospective Determine Total Funding Amount Complete PCP Determine Total Funding Amount Services to Support PCP Goals Complete PCP

10. Prospective / Statistical • Addresses the budgeting framework questions • Methodology links individual assessment data to costs of services for individuals with similar needs • Assessment based on data on functional characteristics and/or service needs.

11. Prospective…. • The budget amount is determined before the individual service planning process begins • Process is data-based, must be transparent and available for consumer input. • Wyoming’s DOORS, South Dakota’s Service Based Rates, Colorado

12. Retrospective / Developmental • Provider payment allocations are set through a person-centered planning process • Provider rates may be based on statewide tiers or a series of levels reflecting individual need differences • Service amounts, numbers of hours are determined during the PCP process

13. Retrospective…. • Rates may be negotiated based on individual service need and statewide priorities. • Payments typically reflect costs related to service provision, management, administration/overhead, operating, etc..

14. Assessment Tools • Inventory for Client and Agency Planning (ICAP) • Supports Intensity Scale (SIS) • Developmental Disabilities Profile (DDP) • North Carolina Supports Needs Assessment Scale (NC-SNAP) • Maryland Individual Indicator Rating Scale

15. Assessment Issues to Consider • Scopeof assessment tool: national versus state-specific • Psychometrics- Established reliability, validity and standardization • Comprehensiveness– applied to all services and supports (MN in process) or targeted to specific waivers, populations or services • Administration methods: independent, provider or state • Other issues - stability, outlier coverage,gaming

16. ICAP • Structured evaluation of adaptive and problem behaviors – 185 items • Information on diagnosis, disability type, personal characteristics, functional limitations and service needs. • Assist in screening, monitoring, managing and planning. • Not designed for rate-setting and allocation but is used by some states for this purpose • Used by: MT, WY, SD, TX, TN, IL, NE.

17. Strengths Reliable psychometrics Distinguish individual behavior differences Children and Adults Straightforward scoring Weaknesses Minimal health status information Minimally addresses support need Deficit based Inter-rater reliability Inadequate coverage of vocational supports No info on non-paid caregivers Does not support individual service planning Using the ICAP*

18. Supports Intensity Scale • Measures frequency of support needs across life activity, behavioral and medical areas. • Developed by AAIDD for adults • Solid reliability and psychometrics • Designed to assist individual support planning • Subscales: home living, community living, lifelong learning, employment, health, safety, and social • Does not gather some individual information • States: UT, PA, GA, CO, WA, LA, OR, +…

19. Strengths Designed to assess support needs of people w/ ID/DD Directly identifies frequency & intensity of support needs Assists individual support planning Evaluates employment support needs Strong psychometrics Gathers information from multiple sources Weaknesses Best administered by skilled individuals Additional personal information must be provided Inter-rater reliability is less strong (but being improved) No child version Using the SIS*

20. State Models Wyoming - DOORS • In existence since the mid 1990s • ICAP to determine eligibility and functional status • Sets individual rate using multiple regression techniques based on: • Individual characteristics • Historical expenditures • Service utilization

21. State Models cont’d…. Washington • Payment model with information from the SIS and other consumer related factors including service hours and support levels. • Determines direct support component of residential service rates • Individual payment amounts across 7 levels • In process – also working on payment models for employment supports, adult community access and others.

22. State Models cont’d…. Georgia • Developed a statistical proprietary mechanism. Relates SIS assessment data to historical costs, current expenditures and annual funding allocations for the system at large • Designed to achieve the fair and equitable allocation of resources statewide • Rates will be based on a predetermined fee schedule • Will support individual budgeting and self direction.

23. State Models cont’d…. Connecticut • DDS Level Assessment. Currently used to set of level of need that is equated to a budget range. • Identifies needs related to: medical/health, personal care, daily living, behavior/safety, communication, transportation, residential and day supports, social/recreational, unpaid caregivers and other factors • Will establish budget levels by living arrangement type. • Working to standardize provider rates • Will apply to the state’s two waiver programs

24. State Models cont’d…. South Dakota • Sets individual allocation rates – individual budgets for the state’s 19 provider agencies • Uses a statistical regression formula to set individual rates based on: provider costs, individual service usage & ICAP • Strong statistical model similar to Wyoming’s DOORS methodology

25. Policy Issues • Support allocations must be based on reliable cost and service utilization data • The rate setting or individual budgeting methodology must be transparent, flexible, fair and equitable statewide • Adequately cover the cost of services • Permit the state to achieve its policy goals

26. More Policy Issues • Permit individuals receiving support to achieve their own goals and aspirations • Support self-direction • Respond to outliers and unanticipated costs • Minimize financial risk to individuals, providers and the state. • Contain costs, ensure system stability

27. *References Assessment tool strengths and needs: Smith, G., & Fortune, J. (2006) Assessment Instruments and Community Services Rate Determination: Review and Analysis

28. Contact Information Charles Moseley Ed.D. NASDDDS cmoseley@nasddds.org (703) 683-4202