DOJ, RI Spar Over Contempt In Olmstead Case

Federal Courthouse in Providence

By Gina Macris

The state of Rhode Island told a judge it cannot be held in contempt of a 2014 civil rights consent decree seeking to integrate adults with developmental disabilities in their communities because of circumstances beyond the state’s control.

But the U.S. Department of Justice (DOJ) says that the state has only itself to blame for its failure to comply.

The state’s “persistent choices to under-fund the system have created a dramatic provider shortage” that has left the target population isolated, the DOJ said in a counter-argument submitted Friday, Sept. 10, to the U.S. District Court.

The “refusal to adequately fund the Consent Decree is precisely the kind of self-imposed inability to comply” that undermines the state’s arguments in its defense, the DOJ said.

The decree stems from a 2014 finding by the DOJ that the state violated the Americans With Disabilities Act by relying too much on sheltered workshops paying sub-minimum wages and isolated day care centers, which kept people with disabilities out of mainstream society. The Olmstead decision of the U.S. Supreme Court has re-affirmed the rights of people with disabilities to receive support in their communities to give them a chance to live regular lives.

The DOJ further cites warnings of an independent court monitor a year ago that the state will be unable to comply with the consent decree by 2024 unless it came up with a multi-year plan to overhaul its developmental disabilities system, which for a decade has encouraged segregated care over integrated services. Such a plan has not been forthcoming.

The state’s lawyers, Marc DeSisto and Kathleen Hilton, submitted arguments Sept. 1 in response to a DOJ motion two weeks earlier that asked the Chief Judge of the U.S. District Court to find the state in contempt of the consent decree and impose fines ranging up to $1.5 million per month. Chief Judge John J. McConnell, Jr. has scheduled a hearing the week of Oct. 18 through Oct. 22.

The state’s lawyers maintained the state could not meet benchmarks for integrated employment and other criteria because of the COVID-19 pandemic, as well as resistance by adults with developmental disabilities themselves to work and non-work activities in the community.

But in its reply Sept. 10, the DOJ said the state’s characterization of the population “paints an inaccurate and offensive picture of people with developmental disabilities” and “reflects a profound misunderstanding of the nature, purpose, and obligations of the Consent Decree.”

DeSisto and Hilton, meanwhile, also argued that numerical targets for employment of adults with disabilities were not required by the consent decree, even though, as the DOJ said, documents show that state officials have admitted the opposite in numerous statements to the court since 2014, in writing or in person..

The state’s lawyers also maintained the state cannot be held in contempt until after the agreement expires on June 30, 2024 – an interpretation the DOJ said is unheard of in litigation involving system-wide reform.

In picking apart the state’s position over 28 pages, the DOJ said the state is urging the court “to adopt an interpretation of the consent decree that is “at odds with the decree’s text and purpose,” the DOJ said.

The state maintained the consent decree “imposed what could only be described as a cultural shock on the targeted community. After years of receiving services in “non-community” settings, “they are being told that their lifestyle must change,” the state’s lawyers said.

The DOJ disagreed. Rather than being told what they must do, the DOJ said, those eligible for services and their families have the right to make informed choices after receiving education and support about what working and enjoying leisure activities in the community might mean for them.

The state’s own data show that it “dramatically overstates” the resistance to integrated services, with 80 of 1,877 persons, or 4 percent, opting out of integrated services through a formal variance process, the DOJ said. And it cited a report from a court monitor in 2016 who had said he found “strong broad-based acceptance of the goals and desired outcomes of the consent decree.”

Similarly, the DOJ lawyers rejected the state’s argument that the COVID-19 pandemic prevented compliance with the annual employment targets in the consent decree. The pace of new job placements had slowed significantly more than a year before the onset of COVID-19, the DOJ said.

While the pandemic did make compliance more challenging, the state made “minimal efforts” to serve the consent decree population during the pandemic, the DOJ’s civil rights division argued.

“Given the availability of enhanced federal matching funds for providing integrated Medicaid services like those the Consent Decree requires, the State has the opportunity to increase funding for integrated employment services, provide the full amount of integrated day services to each target population member, and enhance wages to attract the required number of service providers,” the DOJ said. Its memorandum is signed by Rebecca B. Bond, chief of the DOJ’s civil rights division, as well as trial attorneys expected to litigate the case in October.

The state did earmark $39.7 million in federal-state Medicaid money to raise the wages of workers and their supervisors by $2 to $3 an hour in the current budget, a roughly 15 percent increase, but only at the conclusion of court-ordered negotiations between state officials and providers.

DeSisto and Hilton, the state’s lawyers, also said the state is finalizing the language in a request for outside proposals “for evaluation and implementation of new rate and payment options for (the) Developmental Disabilities Services System.” The preparation for the request for proposals indicates that BHDDH plans to go out to bid through the state purchasing system, which can take several months.

The state last conducted a rate review in 2010 and 2011, but the General Assembly did not follow the recommendations of the consultant, Burns & Associates. Instead, it set dozens of reimbursement rates for private providers roughly 17 to 19 percent lower than Burns & Associates recommended, with the Department of Behavioral Healthcare, Developmental Disabilities and Hospitals (BHDDH) saying that it still expected providers to maintain the same level of service.

In November 2018, a principal in Burns & Associates, Mark Podrazik, testified before a special legislative commission that that a rate review was already overdue. Rates should be reviewed every five years, he said.

A few months later, BHDDH hired NESCSO, the nonprofit New England States Consortium Systems Organization, to analyze Rhode Island’s developmental disabilities system from top to bottom.

Although the NESCSO contract called for a rate review and analysis of alternatives to the state’s fee-for-service reimbursement system, NESCSO was asked to present options for change but to make no recommendations.

The BHDDH director at the time, Rebecca Boss, said the department wanted to expand its analytical capability and make its own choices going forward.

The 18-month contract, which cost $1.1 million, produced a final report and supplementary technical materials which, among many other things, said the provider system was significantly underfunded. Since the report was completed July 1, 2020, BHDDH has remained silent on its findings, and has not exercised options for renewal of NESCSOs services.

In their memorandum, the state’s lawyers said that “the intention of the rate review process is to strengthen the I/DD system and services provided to individuals, as well as to address provider capacity to deliver those same services. Thus, the State can and will at hearing clearly demonstrate that it has been ‘performing its obligations’ under the various sections of the Consent Decree.”

The DOJ has scoffed at that notion. The DOJ said in its original filing in August that it is prepared to show the “State failed even to ask its Legislature for a sufficient appropriation, and that the State failed to make efficient use even of the resources it had – for example, by failing to modify State rules and incentives that favor providers of less integrated services over providers of more integrated services.

RI DD Services: The Annual Scramble Begins To Avoid Waitlists or Reduced Payments To Providers

By Gina Macris

For the second consecutive year, the director of the Rhode Island Department of Behavioral Healthcare, Developmental Disabilities and Hospitals (BHDDH) has raised the possibility that adults with developmental disabilities might face waiting periods for services if the department cannot resolve a projected $9,.4 million deficit by next June.

Most of that estimated $9.4 million shortfall - $7.6 million – occurs in the Division of Developmental Disabilities (DDD).

Waiting lists and reductions in reimbursement rates to private providers are among alternatives proposed by BHDDH director Rebecca Boss in a corrective action plan for dealing with the shortage in state revenue. Private organizations do most of the front-line work with adults facing intellectual and developmental challenges.

Any state agency running over budget must submit a corrective action plan to the state budget office. Seven other agencies are in the same position as BHDDH.

While complying with the requirement for a deficit-reduction plan, BHDDH also has prepared a budget request which seeks a additional $12.7 million in state revenue for the private system of developmental disability services through June 30, 2020. That total includes:

• $7.6 million in supplemental funding to close the gap in payments to private service providers during the current fiscal year.

• $5.1 million for the fiscal year that begins July 1, 2019.

No Wage Hikes In BHDDH Budget Request

The combined $12.7 million request does not reflect any wage increases for direct care workers in private agencies, a BHDDH spokeswoman said. According to a trade association, workers receive an average of $11.36 an hour - less than the $12 hourly pay offered at the Target store on the other side of the Massachusetts state line in Seekonk during Thanksgiving week.

The consultant involved in developing the existing fee-for-service rate structure seven years ago said recently that it’s “past time” for an overhaul of the reimbursements. Both House and Senate leaders say they support the idea of wage hikes for front-line workers.

Governor Gina Raimondo has not responded to email requests from Developmental Disability News for comment on recent public remarks of the consultant, Mark Podrazik, President of Burns & Associates.

Raimondo is due to present her budget proposal to the General Assembly the third week in January. She must consider many factors, including a projected $41.9 million deficit in overall state spending and recent revenue estimates running about $5.4 million below the previous projections, made last May.

Federal Officials Watching Budget Process

A lot can happen between now, the start of the budget planning cycle, and the end of June, when General Assembly adopts final figures to close out one fiscal year and launch a new budget on July 1.

And when it comes to spending on developmental disabilities, the conversation has broadened in the last several years to include the ever-increasing demands for reform imposed by a 2014 federal civil rights consent decree between the state and the U.S. Department of Justice.

Before the budget was finalized in the last session of the General Assembly, the independent federal court monitor for the consent decree had sought and obtained written assurances from Raimondo that the state would support mandated systemic changes in services as Rhode Island moves toward community-based, integrated supports of adults with developmental disabilities.

In a letter dated May 14, 2018 to Charles Moseley, the federal court monitor, Raimondo said, “Rhode Island has made significant progress in meeting the requirements of the Consent Decree, and we will continue to prioritize this work.”

What the state’s commitment to developmental disabilities looks like in the current budget is level funding.

Last January, Raimondo proposed a cut of $18.4 million to payments for private service providers, but after better-than-expected revenue estimates in May, pressure from constituents, and Moseley’s request for assurances, Raimondo reversed her position and the General Assembly approved a status quo budget.

Boss Details The Current Problem

Now Boss says that level funding will not be enough to meet expenses, primarily because of an increasing caseload and rising average costs per person. These two trends can be traced back to compliance with the consent decree.

In the last fiscal year, which ended June 30, DDD spent a total of $228.3 million in federal-state Medicaid funds, including $111.1 million in state revenue, for payments to private agencies that provide most of the developmental disability services, Boss wrote to the state Budget Office in October.

The current budget authorizes an expenditure of $229.4 million for those Medicaid payments, with $107.5 from state revenue and the rest from the federal government.

However, in the current budget, DDD is expected to stretch the $229.4 million to cover some additional mandates:

• a total of $1.5 million on contracts and staff to support the consent decree

• $620,000 – about $400,000 more than anticipated – to pay for an increase in wages for home health aides and licensed practical nurses (LPNs) who serve adults with developmental disabilities in their own homes. Boss said the state Medicaid office had set a slightly higher rate for the LPNs than the department had anticipated.

Together, these two factors mean that there is $1 million less in the current budget than there was in the last one for actual services to adults with developmental disabilities, Boss wrote in a report to state Budget Office on spending for the first quarter of the fiscal year.

At the same time, DDD estimates its overall caseload will increase about 1.5 percent during the current budget cycle, based on trends over the last two years. That increase will cost an additional $1.1 million from state revenue,, according to Boss.

In addition, nearly 900 persons are slated for re-evaluation of their needs during the current fiscal year, with interviewers using a revised assessment that has been resulting in generally higher per-person costs since it was adopted in November, 2016, Boss said. The use of the revised assessment, the Supports Intensity Scale – A, is expected to add about $900,000 from state revenue to service costs, Boss wrote in the first-quarter spending report, submitted in October.

Moreover, DDD expects to spend all $6.8 million allocated by the General Assembly for a supported employment program that pays private providers performance bonuses for job placement and retention., The first allocation, in the fiscal year that began July 1, 2016, was underutilized.

Boss said she did not favor a wait list for services as a corrective action plan because it would cause hardship and make DDD unable to continue complying with the 2014 federal consent decree.

Rate reductions to private service providers also would make it impossible to comply with the consent decree and would destabilize the entire system of care, Boss said.

Savings anticipated in State-Run Group Homes

Boss said she does favor another option, consolidation of the state-run group home system known at Rhode Island Community Living and Supports (RICLAS.) DDD is working on closing one state-run group home and relocating existing staff to save on overtime costs, Boss said.

Changes in group home configuration toward smaller units more accessible to the community are being required anyway by the Medicaid Home and Community Based Final Rule.

The consultant for Burns & Associates, Mark Podrazik, recommended in 2011 that the state gradually eliminate RICLAS to more more equitably fund private providers, who were facing severe cuts in payments that resulted in dramatically lower wages and made it difficult for employers to fill job vacancies, problems that persists today.

In testimony Nov. 13 before a special Senate commission, Podrazik said he was told in 2011 that the state did not want to address RICLAS out of concern about a fight from unions.

Over the last several years, however, the size of the RICLAS caseload has declined through attrition. For example, at the start of 2016, there were 210 persons in RICLAS homes, state officials said at the time. Six weeks ago, in mid-October, the RICLAS caseload had shrunk to 126, according to state records.

Healthcare Consultant Says "It's Past Time" For RI To Revisit Rates It Pays For Private DD Services

From foreground, on the right, Rebecca Boss, Louis DiPalma, Peter Quattromani, Kelly Donovan, Deb Kney, and Kevin McHale, all members of the Project Sustainability Commission. DiPalma is chairman. All photos by Anne Peters

By Gina Macris

Rhode Island is overdue in undertaking a comprehensive review of rates it pays private providers of services for adults with developmental disabilities, according to a top official of a healthcare consulting firm who helped develop the existing payment structure seven years ago.

Mark Podrazik

“It’s past time,” said Mark Podrazik, president and co-founder of Burns & Associates. He said the firm recommends an overhaul of rates once every five years. Podrazik appeared Nov. 13 before a Senate-sponsored commission which is evaluating the way the state organizes and funds its services for those facing intellectual and developmental challenges.

The commission chairman, Sen. Louis DiPalma, D-Middletown, had invited Podrazik to help the 19-member panel gain a deeper understanding of the controversial billing and payment system now in place before it recommends changes intended to ultimately improve the quality of life of some 4,000 adults with developmental disabilities.

Burns & Associates was hired by the Department of Behavioral Healthcare, Developmental Disabilities and Hospitals (BHDDH) in 2010 to develop and implement Project Sustainability, a fee-for-service system of payments to hold private providers accountable for the services they deliver and give consumers more flexibility in choosing what they wanted, Podrazik said.

In answering questions posed by commission members, Podrazik made it clear that the final version of Project Sustainability was shaped by a frenzy to control costs. The state ignored key recommendations of Burns & Associates intended to more equitably fund the private service providers and to protect the interests of those in the state’s care.

Podrazik said that overall, Burns & Associates believed the Division of Developmental Disabilities (DDD) had neither the capacity or the competence implement Project Sustainability at the outset or to carry out the mandates to companion civil rights agreements with the U.S. Department of Justice reached in 2013 and 2014.

“I think people were a little shocked” by the new federal requirements to integrate day services in the community and by the question of “who was going to do it,” Podrazik said of the DDD staff at the time.

DDD also had an antiquated data system that ill served Project Sustainability and the separate demands for statistics imposed by a federal court monitor overseeing the consent decrees.

Podrazik said the aged IT system was the biggest problem faced by Burns & Associates.

Asked whether funding changed to implement the civil rights agreements, Podrazik said he didn’t recall that there were any significant changes, if any at all. Burns & Associates ended its day-to-day involvement with BHDDH in Feb. 2015, when Maria Montanaro became the department director. (She has since been succeeded by Rebecca Boss, and there has been a complete reorganization and expansion of management in DDD. A modern IT system recently went online.)

Between the fall of 2015 and early 2016, Burns & Associates had a separate contract with the Executive Office of Human Services, which asked for advice on cutting supplemental payments to adults with developmental disabilities.

While Project Sustainability was supposed to give consumers more choice, the U.S. Department of Justice found just the opposite in a 2013 investigation.

DOJ lawyers wrote in their findings that “systemic State actions and policies” directed resources for employment and non-work activities to sheltered workshops and facility-based day programs, making it difficult for individuals to get services outside those settings.

“Flexibility” Functioned As Tool For Controlling Costs

At the meeting Nov. 13, Andrew McQuaide, a commission member and senior director at Perspectives Corporation, a service provider, suggested that features of Project Sustainability ostensibly designed to encourage flexibility and autonomy for those using the services functioned in reality as mechanisms to control costs.

Podrazik said, “In my heart of hearts, I think everybody wanted more flexibility,” but “then the financial constraints were imposed in such a way that the objectives could not necessarily be met.”

“We were not hired to cut budgets,” Podrazik said. Going into the project, “we did not know what the budget was” for Project Sustainability.

He said Burns & Associates recommended fair market rates for a menu of services under the new plan. For example, it proposed an hourly rate for direct care workers was $13.97. But BHDD refused the consultants’ advice to fight “aggressively” for this level of funding, Podrazik said. With the budget year that began July 1, 2011, BHDDH recommended, and the General Assembly adopted, a rate of $12.03 an hour, nearly two dollars less.

The state had the option to change the rate effective Oct. 1, 2011, and it did, dropping the hourly reimbursement for direct care workers to $10.66 to absorb last-minute cuts made by the General Assembly in the developmental disabilities budget for the fiscal year that had begun July 1. (Rates have increased slightly since then. The average direct care worker made about $11.36 an hour in early 2018.)

“I understood why the department (BHDDH) was doing what they were doing, because they were getting an incredible amount of pressure on the budget – so much so that they were getting their hand slapped when they were over,” Podrazik said.

“From the outside coming in, there was a lack of confidence that BHDDH could actually administer a budget that came in on target, so that there was an intense scrutiny to keep the budget intact. It did not help that that they were cut and that there were no caseload increases (in the budget) for multiple years,” Podrazik said.

“They were behind the eight-ball before anything was contemplated,” he said.

Louis DiPalma, Rebecca Boss

DiPalma, the commission chairman, saw the situation from a different perspective: “Someone will say the agency exceeded the budget, but if it was unrealistic from the get-go, you’re going to exceed that budget.”

As a legislator, DiPalma said, he has looked at developmental disability service budgets for ten years, and there hasn’t been one that was realistic.

“Right,” Podrazik replied, adding that funding for developmental disabilities had been declining from year to year in Rhode Island, even before Burns & Associates was hired for Project Sustainability.

Podrazik said he hasn’t been following developmental disabilities in Rhode Island during the last few years, but “somebody should look at the rates, if for no other reason” than “we’re in an economy that’s very different than it was in 2010.” He cited health care costs and a move toward “$15 an hour wages.”

“It’s a whole different landscape,” he said.

Consultants Recommended Eliminating Separate State-Run DD System

In 2011, with Project Sustainability facing a funding shortage even before it got off the ground, Burns & Associates recommended that BHDDH get more money to support the services of private agencies by eliminating – gradually – the state-run developmental disabilities system, called Rhode Island Community Living and Supports (RICLAS.)

At the time, average per-person cost for a RICLAS client ran about three times more than the average in the privately-run system. All the RICLAS clients could eventually be transferred to private providers, Burns & Associates advised the state.

“This recommendation was shut down immediately, with the reason being a protracted fight with the unions,” Podrazik said in prepared remarks.

Burns & Associates then recommended lowering the reimbursements to RICLAS. “This was also shut down,” Podrazik wrote.

“It was apparent early on that there were funds to be redistributed between RICLAS and the Private DD system, but there was no appetite to do so. It is unclear exactly where this directive was coming from within state government, but that was the directive given” to Burns & Associates, Podrazik wrote.

Providers Expected To Maintain Same Service For Reduced Pay

Commission members asked Podrazik whether anyone at Burns & Associates or state government believed that it was possible for private service providers to absorb the rate reductions written into Project Sustainability, given the fact that about half the agencies were already running deficits before the program was enacted.

McQuaide quoted from the memo that BHDDH sent the General Assembly in May, 2011, explaining its approach to implementing Project Sustainability.

“We did not reduce our assumptions for the level of staffing hours required to serve individuals,” the memo said. “In other words, we are forcing the providers to stretch their dollars without compromising the level of services to individuals,” the memo said.

McQuaide asked, "Did anyone actually think that was possible?”

“I don’t know,” Podrazik replied, but he remembered meetings in which participants expressed sentiments similar to the quotation highlighted by McQuaide.

Given the budgetary restrictions, Podrazik said, he favored reducing rates rather than cutting back on services or creating a waiting list for services.

Podrazik said Burns & Associates was hired to deal with certain problems; not to review services for adults with developmental disabilities top to bottom.

Assessment Used For Funding Became Controversial

Asked to change the assessment used to determine each person’s need for support, Burns and Associates recommended the Supports Intensity Scale, or SIS, and advised it should be administered by an entity “other than the provider or the state to avoid the perception of gaming the system,” he said.

The state went forward with the SIS, linked it to funding individual authorizations, or personal budgets for clients, and assigned the administration of the assessment to the state’s own social caseworkers.

The fact that the SIS is administered within BHDDH has been criticized by the DOJ and an independent federal court monitor. With federal scrutiny on BHDDH, and numerous complaints from families and providers that the SIS scores were manipulated to cut costs, the department switched to a revised SIS assessment and retrained all its assessors in November, 2016.

Funding Authorized Three Months At A Time To Control Costs

According to Podrazik, Burns & Associates recommended each client’s funding authorization – or personal budget – be awarded on an annual basis, to allow individuals to plan their lives and providers to look ahead in figuring out expenses.

But the state insisted on the option to change reimbursement rates on a quarterly basis as a means of managing costs more closely within a fiscal year. That was the feature of Project Sustainability which enabled BHDDH to impose two consecutive cuts on providers, once on July 1, 2011, and a second time on Oct. 1, 2011. Since then, rates have increased incrementally.

At the hearing, Podrazik illustrated the difference between a yearly authorization and a quarterly one in the life of a consumer.

“Maybe someone goes away for the month of August,” he said. If that person has a quarterly authorization, the money for services in August reverts to the state. But with an annual authorization, the funding can be used for the person’s benefit during another month of the year.

Podrazik agreed with a commission member, Peter Quattromani, CEO of United Cerebral Palsy, that quarterly authorizations compromise the flexibility intended to be part of the design of Project Sustainability.

Podrazik said he knows of no other state that makes quarterly authorizations for developmental disability services.

DiPalma, the commission chairman, asked if there was any thought given to the impact of a requirement that providers document how each staff person working during the day spends his or her time with clients, in 15-minute blocks.

Podrazik said, “I don’t think people thought the impact would be negligible, but the desire for accountability outweighed that, and I fully endorsed them.”

Project Sustainability decreased overhead costs to private providers but did not offset those cuts with allowances for hiring the personnel necessary to process the documentation.

When DiPalma thanked Podrazik for his time, Podrazik quipped that Rhode Island was “the last place I thought I’d ever be.”

“The Rhode Island project wore me down, so I’m working with hospitals these days,” Podrazik said.

He said he came back to Rhode Island because DiPalma was very persuasive and because he wanted to “set the record straight” on the involvement of Burns & Associates with Project Sustainability.

Burns & Associates President To Speak To RI Senate Commission Studying DD Reimbursement

A special commission of the Rhode Island Senate on “Project Sustainability” will meet Tuesday, Nov. 13 to hear a presentation from the president of a healthcare consulting firm which helped the state develop its current fee-for-service Medicaid reimbursement system for private providers who serve adults with developmental disabilities.

The speaker, Mark Podrazik , is the president and co-founder of Burns & Associates, an Arizona-based company which advised the state Department of Behavioral Healthcare, Developmental Disabilities and Hospitals (BHDDH) on recommendations BHDDH made to the General Assembly. The legislature made the final decisions about the reimbursement model, which was enacted in 2011.

Burns & Associates was paid nearly $1.4 million for their work developing “Project Sustainability” and analyzing its fiscal impact between 2010 and 2016, according to state records.

Tuesday’s public meeting will begin at 3 p.m. in the Senate Lounge of the State House. Public comment is invited at the end of the session, according to the commission chairman, State Sen. Louis DiPalma, D-Middletown. The commission includes 19 members from state government and a cross-section of the developmental disability community. Among them are two consumers and representatives of advocacy groups and service providers.