Governor’s DODD Budget Includes Investments in Waiver Spending and Rate Increases

Governor Kasich’s recently released executive budget includes several noteworthy adjustments to funding within the state’s developmental disabilities system. Touted as an extension of the state’s “historic” investments of the previous budget cycle, the proposal includes increased funding on several important initiatives.[i] However, the budget includes some notable cuts as well. Overall, the budget proposes a small increase in overall spending; a 5 percent increase for FY 2018 and an additional 4 percent increase into FY 2019.[ii] The combination of cuts and investments is likely to draw a mixture of support and criticism. While some will likely laud the governor’s commitment to sustained funding in an otherwise tight budget cycle, others may find fault in what they perceive as an ongoing underinvestment in needed community-based services and supports.

The budget proposal includes $122 million in new spending, which includes both state and federal contributions, primarily focused on efforts to expand community living options for individuals with developmental disabilities. This comes in the form of funding for approximately 1,300 new home-and-community based service (HCBS) waivers, which allow individuals to waive their right to institutional care in favor of receiving services in a home or community-based setting. These waivers are aimed at both continuing to assist individuals living in institutions who may want to leave, and addressing the state’s lengthy waiting list to access waiver services. State funding for waivers created during the past budget cycle will remain, however due to excessive demand, thousands will continue to wait.

Additionally, the governor’s budget includes proposed rate increases for some direct care staff, as well as an enhanced reimbursement rate for waiver services for individuals with complex needs. This is designed as a means to incentivize providers to serve these individuals who require a greater level of care. Rate adjustments are also recommended in the area of “shared-living” for similar reasons.  In shared living arrangements, the individual with a disability lives with one or more nondisabled adults, or a family, who are responsible for the individual’s care. The state has long hoped to expand this option. Additional investments are also marked for expanding access to remote monitoring for individuals living in the community (funded through a half-million-dollar grant from the Ohio Department of Higher Education) and to expand services to multi-system youth with complex needs.

Furthermore, while the Department of Developmental Disabilities (DODD) continues its efforts to downsize large institutions, the budget includes a reimbursement rate increase of 2.5 percent for care in these settings. According to the department, those who remain in institutional care and are unable to transition into the community are more likely to have greater needs, warranting the increased payments. Since efforts began in 2013, the number of intermediate care facility (ICF) residents has decreased by 6 percent. ICF “bed buy-backs” are also a component of this initiative, though few have occurred to date. [iii]

Status of 2016-2017 Budget Initiatives
As noted, the 2016-2017 biennial budget (House Bill 64) included a significant investment in the developmental disabilities system. Nearly $300 million was allocated to DODD services, aimed primarily at increasing access to community living for individuals with developmental disabilities. This aggressive action was a response to a waiting list for home and community- based service waivers in excess of 40,000, and a growing recognition of Ohio’s over reliance on institutional care. Specifically, funding was approved for 3,000 state-funded HCBS waivers, which included 1,864 specifically targeting individuals on the waiting list and 1,136 intended for those currently living in an institution or those being diverted from an institution, who want to live in the community. A small amount of funding was allocated to promote integrated community employment, as the state continues its shift away from a model which favored segregated sheltered workshops and adult day programs.

DODD has been reporting on the progress of these budget initiatives through quarterly “score cards.”[iv] The most recent report was for the first quarter of fiscal year 2017.  Though off to a slow start, progress on allocating waivers funded through the last budget has since gained steam. According to data provided by the department, 100 percent of the waivers targeting individuals on the waiting list have been assigned to date, as well as 100 percent of those intended for people living in institutions to gain access to community living. However, assignment of “diversion” waivers, aimed at individuals seeking admission to an institution who may benefit from a community-based option, has been slow, with just 6 percent assigned to date.

The data reflect that efforts to prioritize integrated community employment over sheltered workshops and adult day programs has continued to prove challenging. Since the first quarter of 2016, there has been an increase of 566 individuals engaged in community employment, though participation still favors enrollment in adult day and sheltered work programs. Enrollment in adult day, or facility-based day supports, has not decreased over the past year, and sheltered workshop participation has decreased only negligibly.  This is significant in that the federal government has issued rules requiring that all home and community-based waiver settings be integrated by 2019. The upshot of this change is that, after the deadline expires, waiver funds can no longer be used to support services like sheltered workshops or other segregated settings.

On a related note, the most recent data scorecard indicates slow progress on a non-budget related front: remediating conflict of interest concerns. The federal government has called on states to separate the entity that provides the case management function to individuals with disabilities from the entities responsible for the provision of waiver services. Ohio must comply with this separation to avoid what is viewed as an inherent conflict of interest. Ohio has relied heavily on a model wherein which many local boards of developmental disabilities provide both the case management function and waiver services.  Therefore, efforts are underway to transition these waiver services to private providers to remove this conflict. As this adjustment will represent considerable changes for consumers and providers, a swift separation has not been embraced by most boards. This is reflected in the data scorecard, which shows that 44 percent of waiver services continue to be provided directly by county boards, in violation of the government rules, and only a small decrease from the first quarter of last year.  This suggests that much change is still coming to counties as this transition continues.

Overall, the governor’s biennium budget proposal represents modest increases in funding for community-based services, and stable funding in most other areas. Additional funding for waivers is commendable given the lengthy wait many continue to face to receive these services. However, the absence of additional funding for integrated employment supports is noteworthy in that the state has considerable work ahead to transition thousands of individuals from sheltered workshops and other segregated settings into acceptable alternatives. Furthermore, the removal of the tax-equity line item will be particularly concerning to those Ohio counties that lack an adequate property tax base sufficient to generate local revenue to provide adequate services for individuals with developmental disabilities. In a budget cycle that’s gearing up to be tight, however, the DODD budget was spared major cuts, and the governor’s proposals suggest a continued commitment to moving the state forward in expanding access to community living for individuals with developmental disabilities.


*Edited March 9, 2017 to reflect updated information provided in Ohio’s Department of Developmental Disabilities’ Redbook.