The Ohio House recently approved its version of the two-year state budget (H.B. 49), taking aim at key provisions in the budget introduced by Governor Kasich. This newest version of the spending bill includes significant alterations in proposed funding for the Ohio Department of Developmental Disabilities (DODD), and axed many, though not all, of the new investments introduced by the administration.

The executive budget, released in February, was ambitious in its funding of the Department, through a proposed commitment of $122 million in additional state and federal dollars. In large part, these funds were intended to support the administration’s efforts to decrease the state’s over reliance on institutional care for individuals with developmental disabilities. The developmental disabilities system has struggled to keep up with waiting lists for home and community-based service (HCBS) services, which allow individuals with disabilities to receive the services necessary to stay in their homes, and avoid institutionalization. Cash-strapped counties are often unable to meet the demand with local funds. The waiting list exceeds 40,000 individuals, including some individuals currently residing in institutions who want to leave. Efforts to date aimed at “rebalancing,” or better supporting community-based services in lieu of institutions, have been met with a mixture of praise and cynicism, as some view the administration’s efforts as inadequate to address the need.

In the executive budget, these efforts manifested in a proposed additional 1,300 state-financed HCBS waivers. Rate increases to support improved wages for direct care staff were also a key provision (high rates of turnover among staff is problematic within the system), as were adjustments designed to better support “shared living” arrangements and increased reimbursement rates for care provided in institutional settings (ICFs) (see details here).

The original substitute bill introduced by the House significantly undermined these rebalancing efforts by removing the additional funding for new waivers requested by the governor. Moreover, the bill removed the rate increase for direct service providers and ICFs, and eliminated proposed increases to support shared living. The House then went yet another step further by also including language that would prohibit both the state and individual counties from increasing certain HCBS waiver slots over the next biennium, and prohibit any Medicaid reimbursement rate increases to support sharing living, complex care needs, or wage increases for direct care staff. Disability advocacy groups were quick to condemn the proposed cuts and modifications prior to the vote, noting their potential to significantly weaken the state’s effort to modernize the system and rely less on segregated, institutional care.

Disability Rights Ohio, the Ohio Association of County Boards of Developmental Disabilities, and the Arc of Ohio all expressed disapproval on various provisions in the substitute bill. A statement released by the Arc remarked, “We believe these harsh prohibitions will take the choice of community inclusion away from families and will place individuals who may want to live and work in the community at a greater risk for institutionalization.” [i]

In the final House version, which passed May 2, some of the controversial language had been removed and the cuts were less severe, no doubt in response to fierce opposition from consumers and advocacy groups. The aforementioned prohibitions on increasing waiver slots and adjusting Medicaid rate reimbursements during the next biennium were removed via an omnibus amendment. Nevertheless, DODD spending overall was reduced from the amounts proposed in the executive budget by about $31 million in FY 2018, and nearly $59 million in FY 2019. Proposed ICF rate increases were eliminated. While some of the additional funding for HCBS waivers was preserved, the final version was far less generous in supporting community living. While it’s not yet clear how the department would specifically reconcile the budget reduction, DODD Director John Martin has maintained that he will prioritize spending on workforce (presumably via wage increases) and additional HCBS waivers in spending.

The bill that passed through the House also included several non-appropriation provisions, including changes to the HCBS waiting list procedure, which would emphasize assessed need rather than expressed need, or requests for services, in determining the need for a waiting list. Additionally, County Boards of Developmental Disabilities were given greater responsibility and oversight in conducting quality reviews of supported living facilities, among other changes.

The decision by the House to not fully support the governor’s additional waiver funding comes at a particularly contentious time in Ohio. The bill passed the House on the heels of a decision by a federal judge who recently ruled that a class action lawsuit, filed by Disability Rights Ohio, may proceed. The suit, targeting Governor Kasich and other state officials, raises issues of what the group sees as continued segregation, in work and employment, of individuals with disabilities.[ii] Meanwhile, another disability rights group has filed a counter motion to stop the lawsuit, claiming the Disability Rights’ class action overlooks the needs of the most vulnerable who rely on institutional care more heavily and therefore, they believe, may not benefit from an increased emphasis on home and community-based care. [iii]

The DODD budget will not be finalized until it moves through the Senate, and is signed into law by the governor, sometime before July 1. Additional modifications are likely; both the House and Senate have been tasked with making significant spending reductions as state revenues were far below expectation.  Therefore, further cuts to the DODD budget are possible in the Senate version of the bill, which could further challenge the state’s efforts at rebalancing, and add fuel to the fire as litigation on the issue continues.