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Preliminary

Analysis of the Health and Human Resources Budget for the Settlement Agreement
Robert W. Anthony, Ph.D.* Member of the Board Parents & Associates of the Northern Virginia Training Center December 4, 2012 *Dr. Anthonys qualifications are found in Attachment I.

Executive Summary
On January 31, 2012, Health and Human Resources briefed the Senate Finance Committee on their budget, estimated to require $340.6 million in new General Fund[s], to cover the costs of the now final Settlement Agreement with the U.S. Department of Justice and the executive branchs decision to transition current residents of Virginias Training Centers into community placements. Since HHR did not publicly document their sources and methods, this analysis reconstructs the HHR Budget from postings on the web by HHR and the Department of Behavioral Health and Developmental Services. This analysis clarifies the interpretation of the HHR Budget and provides a basis for examining its assumptions and coverage. Leaving all five of Virginias Training Centers open would likely have a neutral effect or save Virginias General Fund more money than would closing four of them, as planned. The HHR Budget assumes ID waiver rates that were recognized by all parties not to be adequate to support most current Training Center residents, many of whom came there after failing to find adequate placements in the community. Providers and peer-reviewed scientific research both estimate that adequate community placements for this very vulnerable and challenging population will cost as much as Training Center placements. Transitioning residents of Training Centers to the community increases mortality risks. Reducing the level of support after transition or hurrying the transition process exacerbates these risks. Most community placements are too small to justify the cost of two staff on the overnight shift that provides emergency backup and inhibits abuse and neglect. Access to nursing and professional services is either delayed or very expensive if on site. Characteristics such as these cause an estimated 72 percent higher mortality for those transitioned to the community. Small regional Training Centers would appear economically viable and preserve the connections between residents and their local community. Over 97 percent of Authorized Representatives polled want those they represent to remain in their local Training Center. Moves would sever ties with the four volunteers for each resident at NVTC. By citing lower per person rates at community Intermediate Care Facilities, the HHR Budget brief opens up for consideration the option of smaller regional Training Centers. This analysis shows the huge leverage that waiver rates and continued unmet needs in the community have over the total budget for waiver placements. Training Centers might provide some relief. The HHR Budget does not show the underlying baseline budget of approximately $4.5 billion for those already receiving supports for ID/DD in 2012, a budget 13 times larger than the new General Fund request of $340.6 million. Overall, community supports constitute 80 percent of total funding for ID/DD. If the 8.1 percent growth rate of ID waiver costs during the last decade continues through the Settlement Agreement period, it would add $1.9 billion or 48 percent more to the 10-year budget. Organizational integration and economies of scale at Training Centers offer options to contain costs for those few with the most intense professional services and behavioral management needs. . 2

Summary of Findings
This analysis is offered in a cooperative spirit. Although it focuses on apparent problems with the Health and Human Resources Budget to cover the costs of the now finalized court Settlement Agreement and of the executive branchs decision to close four of its five Training Centers, the purpose is to alert policymakers to these problems so that they can put Virginia on the best path to a better, more integrated system of supports for those with Intellectual Disabilities and Developmental Disabilities. On January 31, 2012, the Senate Finance Committee was briefed on the HHR Budget to cover the costs of the now finalized Settlement Agreement. The HHR Budget also assumed that all current residents of Virginias five Training Centers would transition into community placements. Since there are no public documents giving the analytical support for those final amounts, it is very difficult for interested parties to identify the planning assumptions, uncover the unstated cost baseline upon which the HHR Budget builds, or assess the appropriateness of individual per person rates. Any one of these aspects could significantly impact future General Fund obligations. This analysis reverse engineers the principal cost items in the HHR Budget, based on annual per person rates posted on the web by HHR and the Department of Behavioral Health and Developmental Services. After validating an approximate understanding of the HHR Budget construction, the analysis examines the underlying assumptions, the discrepancies between different sources of information, major cost drivers, and alternatives that might improve the system of supports.

The Impact of Keeping Training Centers Open

Leaving all five of Virginias Training Centers open would likely have a neutral effect or save Virginias General Fund more money than would closing four of them, as planned. The reason why leaving the centers open would cost the same or less than closing them lies in inaccuracies in the HHR Budget. It overestimates the cost of Training Center placements while underestimating the cost of community supports for those leaving a center. On balance, Transition Waiver Slots are likely to cost as much as Training Center placements. Community costs will be much higher than estimated by HHR. A September 18, 2012 HHR briefing estimated the Transition Waivers would cost, on average, $104,000 per person annually. Modeling analysis of the HHR Budget agrees with this rate assumption. Since those who have been able to successfully leave Training Centers for community placements at this low rate have been those requiring the least challenging supports, one would expect people remaining in Centers to need much more costly support. Moreover, the DBHDS has recognized that the waiver funding is inadequate to serve this population. A 2010 DBHDS report stated, The 3

disparity [in funding] makes it difficult for those with complex medical or behavioral conditions to receive sufficient care and services under the ID waiver program.1 So, when the HHR Budget in the January 31,2012, briefing document assumed that Medicaid waiver structure and provider rates do not change, it was assuming lower costs for waivers than will be needed to care for people transitioning from Training Centers. Additional evidence casts serious doubt on the HHR Budget briefing assumption that the maximum cost for transfers to the community would cost $138,000 per year. This rate applied to community Intermediate Care Facilities for those with Mental Retardation in 2011, but unlike Training Centers, these ICFs often will not accept applicants who are not mobile or have other challenging conditions. For a different year, a 2009 analysis by Braddock and others show community ICF rates for Virginia that are approximately the same as those for Training Centers.2 Their analysis cites per person rates in community ICFs as $251,000 for those with 15 or fewer beds, with an average over all sizes of $217,000. Training Center costs are lower than the HHR Budget estimate. In January 2011, DBHDS cited a $216,000 per person rate for Northern Virginia Training Center but only a $181,000 rate as the statewide average.3 The HHR Budget used the higher rate for their estimation of Facility Savings rather than the lower average number consistent with the waiver costs in that earlier period. This apparent inconsistency in choosing the NVTC rate artificially increased the Facility Savings by $163.1 million, which is 55 percent of the $295.5 million net savings HHR estimates for closing Training Centers. Overall, community provider estimates and peer-reviewed academic research indicate that Transition Waivers plus other local government costs will roughly equal the current cost of supporting residents in Training Centers. Assuming no difference in cost between Training Center and waiver costs would eliminate the $295.4 million dollar net savings from closing Training Centers estimated in the HHR Budget Making better use of the properties could reduce Training Center costs further. For example, the DBHDS could have, but did not, consider the cost saving proposals put forward in the Northern Virginia Regional Plan developed by stakeholders from across the spectrum of Training Center and community organizations. 4

1 Northern Virginia Training Center Diversion Pilot, DBHDS Report, Item 314 E., November 1, 2010. 2 Braddock, Hemp, Rizzolo, Haffer, Tanis, and Wu, State of the States in Developmental Disabilities
2011, Department of Psychiatry, University of Colorado, 2011. 3 James Stewart, III, Major Issues Facing the Commonwealths Behavioral Health and Developmental Services System, a briefing presentation to a joint meeting of Senate Education & Health and the House Health, Welfare & Institutions Committee, January 13, 2011. 4 Recommendations for service delivery within HPR Region II to enhance services for individuals with intellectual disabilities through collaboration, NVTC, CSBs, and others, November 19, 2010.

The simplest estimate of cost savings from not closing Training Centers is $89 million over the 10 years of the Settlement Agreement. This is primarily the money budgeted to transition current Training Center staff into other employment, and constitutes 26 percent of the HHR new General Funds.

Needless Risks and False Savings from Hurried Closings

Transitioning residents of Training Centers to the community increases mortality risks. Reducing the level of support after transition or hurrying the transition process possibly with needless moves exacerbates these risks. The HHR Budget planners assumed that 213 Training Center residents would either die or otherwise leave Training Centers so that the initial statewide census of 1018 could be accommodated over the 10 years of the Settlement Agreement by only 805 waivers. For this HHR plan to work as designed, those vacating Transition Waiver slots in the community would have to be replaced by other Training Center discharges to fill those waivers. Subsequently, modifications to the Settlement Agreement should reduce this constraint by explicitly stating the right to permanent residency by those who chose to remain in a Training Center. The only way to achieve significant cost savings by discharge to the community would be by a reduction in the level of support that current Training Center residents enjoy, but this would almost certainly elevate the mortality rate of those discharged to the community. About 84 percent of Training Center costs are for professional, direct care staff, and other essential supports; thus, cutting costs, cuts supports. Professionals visiting community residents spend approximately 25 percent of their time in travel. Travel time, therefore, renders impractical the frequent short preventative care visits now enjoyed by Training Center residents. A culture of caring with ever-present social pressure is the principal impediment to abuse, neglect, or error. But small four bed homes could not afford to have one, let alone two, people on duty at night. Such a reduction in supports would, based upon the findings of peer-reviewed studies, exacerbate an observed 72 percent higher mortality rate in community placements. This translates into an estimated 74 excess fatalities over the duration of the Settlement Agreement, a 35 increase over that expected without discharges from Training Centers. There are many good reasons to delay the schedule for closing SVTC and NVTC. The administration has set 2014 and 2015 as the dates for SVTC and NVTC to close in order to maximize their anticipated cost savings needed to implement the Settlement Agreement. Any residents who remain in a Training Center at the scheduled time of closure would be moved to CVTC, whether they remain because they choose a Training Center placement or simply cannot find adequate community placement under the current waiver. Such an approach values an administrative goal more than the preferences of the authorized representatives for the residents to remain in SVTC and NVTC. Removal to CVTC would also deny family and friends ready access to seeing their loved ones. It would also deny the residents contact with the four volunteers for each resident at NVTC, and the more than the 20 years of experience many direct care workers have with NVTC residents. 5

If, as explained above, adequate community supports cost as much as Training Center placements, then there is no cost advantage to adhering to an artificial schedule for closures. Instead, any closures should be based on a timetable that assures the best outcome for the residents. One obvious benefit of a slower closure schedule for SVTC and NVTC would be to take advantage of the restructured waiver to be put in place in 2014 or 2015. In addition, a slower schedule for discharge would provide time to test the effectiveness of the new crisis management and quality management systems and to analyze the outcomes of community placements for Training Center residents who elect that option.

Reasons to Preserve Smaller Regional Training Centers

Small regional Training Centers would appear economically viable, and they preserve the connections between residents and their local community. Nearly all Authorized Representatives want their loved ones to remain in their current regional Training Center. At SVTC, Authorized Representatives continually advocate for retaining Training Center placements. At CVTC, informal polls of Authorized Representatives revealed near unanimous desire to remain at CVTC. At NVTC, 97 percent of those polled would choose to remain. Subsequent to the earlier HHR Budget briefing, the final Settlement Agreement reaffirmed the right of Authorized Representatives to chose a Training Center option. Given the large number of people who wish to remain in Training Centers and the comparability of costs to community costs, wouldnt it make more sense to develop alternative plans for a significant number of residents to remain in their existing Training Centers? Smaller regional Training Centers appear to be cost competitive. According to the HHR Budget briefing, small community ICFs were given as an example of cost efficiency for the community. Perhaps DBHDS could also operate smaller state ICFs, that is Training Centers, economically.

A Underlying Baseline Budget and Cost Drivers

This analysis shows the huge leverage that waiver rates and continued unmet needs in the community have over the total budget for waiver placements. Training Centers might provide some relief. Restructuring the waiver and its rates would be the dominant factor driving up the need for new General Funds. While the HHR Budget briefing shows $340.6 million in new General Fund money is needed, HHRs Budget does not show the underlying baseline budget of approximately $4.5 billion that is being expanded, 13 times larger than the new General Funds of $340.6 million. Looking at the entire budget for ID/DD reveals that 80 percent of the costs for supports depend directly on waiver rates. Given that the waiver needs to be restructured and its rates increased, especially if those with involved conditions are to leave Training Centers, this will put great pressure on the total budget for ID/DD. Methodological aside: Up to this point, the analysis adopted annual rates for waivers and Training Center costs given in the HHR Briefing or DBHDS reports, and these 6

reproduce the HHR Budget rather closely. But broadening the analysis requires more consistency in the timeframe of the rates HHR chose and what supports were included in those rates. With consistent rates, analysis could reconstruct the underlying baseline, examine the impact of rate inflation over 10 years, assess the consistency of the timeframe among the rates HHR adopted, and estimate the impact of restoring the number of new waivers per year to the 360 enjoyed between 2003 and 2010. The various sources on rates appear to have been taken from different years and, without better documentation, this analysis reconciles these as follows: This analysis chose the 2012 waiver cost of $75,465 from the HHR Update briefing to match the $224,245 rate for Training Center placements also from the HHR Update briefing. But this analysis could not determine from these public DBHDS sources whether the rates include children, Day Supports, Acute Care costs, or other possible contributions. Nonetheless, the major conclusions should hold, although actual dollar values might shift with more consistent sources for rates. Assuming that the Training Centers remain open should be budget neutral, hence the artificial rate of $104,000 for Transition Waivers does not apply to this analysis. Continued ID waiver inflation of 8.1 percent would increase total ID waiver costs by $1.9 billion or 48 percent over their $3.9 billion 10-year baseline without inflation. Training Center costs increased from $181,000 to $224,245 over 33 months, also an 8.1 percent annual increase, yet only 33 months cannot establish a precise estimate of average rate. Training Centers, even at somewhat smaller size, offer valuable economies of scale that are more insulated from nursing shortages and waiver rate uncertainties. As an example of an economy of scale, Training Centers efficiently use nursing support. In the community, nurse support would only available by phone, with about an hours travel delay, at a Training-Center-like crisis stabilization center, or at high cost for working in small residences. Should the General Assembly choose to fund only the required average of 291 waivers per year, at the end of the Agreement, the urgent waiver list would be longer than it is now since it grows at roughly 350 per year. The Settlement Agreement calls for an average of 291 new waivers annually, most for people on the urgent waiting list. As the General Assembly provided 360 such waivers, on average, between 2003 and 2010, one should expect that community advocates would request a comparable number of new waivers each year. Possibly advocates would even ask the General Assembly to honor their 2009 legislation promising 400 new ID waivers annually. Providing 360 Waivers instead of 291 would add $145.2 million, or 43 percent more to the HHR new General Funds. Providing 400 additional Waivers would add $208.9 million, or 61 percent more to the new General Funds.

Analytical Support and Discussion


To be as transparent as possible, this analysis presents its sources, methods, and results in a manner that interested readers could trace from assumptions to conclusion. It also presents useful collateral information, discusses the implications of the results, and offers some suggestions. Hopefully, this effort will improve the clarity and focus of subsequent deliberations and offer some insight and options for controlling costs while responsibly supporting those with significant ID or DD.

1. Sources and Methods


This analysis tests its data sources and methods by reproducing the HHR Budget and then applies that understanding in a critique of HHRs underlying planning assumptions. The largest cost items in the HHR Budget represent the aggregate cost of supporting many individuals with ID or DD. But since DBHDS did not publish their sources used to derive the HHR Budget, this analysis obtains the individual per person costs mostly from web postings of HHR, DBHDS, and other reputable organizations. To reproduce the analysis begins with the annual rates per person, accumulates the number of person-years from the schedule in the Settlement Agreement, and multiplies those numbers by their respective rates. Close agreement between these estimated item costs and the item costs given by HHR Budget shows that the major contributions to the budget have been identified. With an understanding of the annual rates used by HHR, this analysis offers several reasons and supporting evidence showing that the individualized annual rates for community placements of those transitioning from Training Centers are inadequate for most residents. Measured against this more appropriate set of rates for the community, leaving all Training Centers open would likely save money. The only alternative way to save money is to severely reduce supports offered in the community, thereby greatly increasing the mortality rate for those discharged from Training Centers, an unethical alternative. Other findings of this work employ sources and methods that are explained in context along with their results. For simplicity, Microsoft Excel was employed for all calculations, and other analysts could easily reproduce the calculations from this description. As a means of later crosschecking the calculations, numbers are reported as they came out to several digits. These extra digits are not a claim of high precision as these calculations are only approximate values good to the first few digits. Everyone reviewing the HHR Budget must realize that it represents a marginal cost compared with a very large unstated, or underlying baseline. This baseline consists of the 10 years of accumulated costs of supporting those already on waiver in the community, the number of waiver slots required by the Settlement Agreement, and the costs of the residents currently in Training Centers, assuming there were no discharges. Over the 10 years of the Settlement Agreement, a rough estimate of this underlying budget baseline is approximately $4.5 billion, which is 13

times larger than the new General Funds in the HHR budget, that is, $340.6 million.

2. Per Person Annual Rates

To estimate the larger HHR Budget item costs, this analysis needs the rates for individual supports, which are the average annual costs per person receiving the support. Table 1 lists the necessary rates for ID, DD, and Transition Waivers, Family Supports, and Training Center placements. Note that most sources are either from 2010 or 2012, which leads to some confusion. The Item and Source column gives the document source and, in some cases, explains how the rates were derived from the source information. Boxes frame the source number, and heavy boxes designate those sources used to reconstruct the HHR Budget. If the source document does not give the General Fund fraction, the Total Rate was split in proportion to the GF and Non-GF amounts given in the HHR Budget. There were two sources for the cost of ID waivers, one that would apply to planning going into 2010 and the other for 2012. But modeling will show that the HHR Budget employed the 2010 numbers. The larger 2012 number for ID waivers might have included other elements such as acute health care or Day Supports, but this was not made clear. By contrast, the HHR Budget average rate for Training Centers was for the planning year 2012. A September update briefing from HHR gave an even higher rate. Future budget estimates should explain what is covered in community supports and employ the same baseline year for their planning rates. Although most of these rates were publicly published by DBHDS or other government agencies, they were not provided by HHR in response to a Freedom of Information Act request.5 In the interest of transparency of government, these sources should be provided for future budget briefings and reports.

A. Understanding the HHR Budget


Mortality plays a large role in reducing the Training Center census over 10 years, and the analysis examines the mortality assumptions and then models the implications of these assumptions on both the number of Transition Waivers and the Facility Savings budget item. Since the methods for analyzing Training Center costs apply equally well to the Community Waivers and Supports, the final section completes the comparison to the HHR Budget baseline. All budget modeling is over the Settlement Agreement period. Just as for the HHR Budget, this analysis assumes constant dollars and does not adjust for the expected annual increases in waiver rates or Training Center rates. 5 Letter from Matthew Cobb, Deputy Secretary of HHR, to Robert Anthony, Ph.D., dated March 19, 2012. 9

Table%1.%Rates%(Annual%Cost%per%Person)%and%Their%Sources%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% for%the%HHR%Budget%Items%Estimated%by%Modeling Planning%%%%%% Date ID%Waiver%Rates Individual)ID)Waiver)from)Plan)to)Eliminate) 2010 Waiting)List* Individual)ID)per)Capita)Cost)Including) 2010 Acute)Care)from)VBPD)Assessment,)2011** Individual)ID)Waiver)Cost)from)HHR) 2012 Update,)September)2012* DD%Waiver%Rates% Individual)DD)Waiver)from)Plan)to) 2010 Eliminate)Waiting* Individual)DD)per)Capita)Costs)from)VBPD) 2010 Assessment,)2010** Family%Supports Item%and%Source Private)communication*** General%%%%% Fund $31,855 $31,893 $38,742 NGF Total%%%%%%%%%% Rate $62,050 $74,727 $75,465

$30,195 $42,834 $36,723

$13,353 $16,080

$12,657 $18,379

$26,010 $37,768

$3,000

OO $88,078 $95,170 $105,408

OO $181,000 $195,574 $216,000

Training%Center%Rates DBHDS)Briefing,)Jan)2011)and)University)of) 2010 $92,922 Minnesota)Report,)2010* ICF/MR)Expenditures)per)Person)for) 2011 $100,404 January)2011,)VBPD)2011)Assessment* Annual)cost)of)a)TC)placement)from)HHR) Budget)Brief)and)DBHDS)Brief,)Jan) 2012 $110,899 2011**** Annual)cost)of)a)TC)placement)from)HHR) Update,)September)2012* 2012 $115,124

$109,121

$224,245

Transition%Waiver%Rates%for%Discharges%from%Training%Centers DBHDS)Briefing,)Sept)2012* )2012***** $52,000 $52,000 $104,000

Note)that)boldOline)boxes)designate)rates)used)in)reconstructing)the)HHR)Budget,)while)the)paleOline) boxes)designate)values)from)other)regerences. *)General)Fund)portion)was)calculated)in)proportion)to)HHR)Budget)item)split)between)GF)and)total)of) GF)and)NonOGF. **)General)Fund)portion)was)calculated)by)dividing)total)GF)expenditures)by)census. ***)Another)source)places)a)tight)limit)on)$3,000:)"DOJ)Implementation)Update")DBHDS,)page)16,)July,) 2012,)gives)the)total)cost)for)1,000)Family)Supports)in)2014)as)$3.2)million,)or)$3,200)per)person. ****)The)2011)DBHDS)Briefing)gave)$216,000)as)the)rate)for)NVTC)alone)but)the)statewide)average)as) $181,000.))Nonetheless,)the)HHR)Budget)calculation)from)this)time)period)employed)the)$216,000)rate) instead.))The)General)Fund)portion)was)calculated)in)proportion)to)the)split)between)GF)and)NonOGF)in) the)HHR)Budget. *****)HHR)Budget)was)assembled)from)numbers)as)recent)as)late)2011;)however,)the)origin)of)the) $104,000)rate)cited)in)the)HHR)Update)Briefing)remains)unclear.

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1. Mortality and Waiver Slots for Discharges from Training Centers

Loss to mortality over the 10 years of the Settlement Agreement accounts for most of the 213 otherwise unaccounted for people given that the original planning baseline census was 1018 Training Center residents but only 805 Transition Waiver slots were offered. a. Assumptions about Mortality Reproducing the effect of mortality on Training Center census reveals HHR planners mortality rate assumptions and illustrates the methods used throughout this analysis. Table 2 shows two methods for calculating the declining census from 1018 to 805 over 10 years. The first calculates the number of fatalities from the mortality rate assuming everyone alive at the beginning of the year remains so throughout the year and then subtracts those fatalities at the end of each year to yield the census for the subsequent year. Since there are some fatalities during the year, the second method estimates fatalities based on the mid-year census. To reduce the census from 1018 to 805 by the January 2022, the mid-year method must assume a slightly higher mortality rate of 23.5 per 1,000 per year rather than 23.2 for the end-of-the- year method. Not shown in the table is a continuous model of mortality for which a mortality of 23.6 per 1,000 would be necessary to drop the census to 805 in 10 years. Table&2.&Discrete&Models&of&Training&Center&Mortality&over&10&Years End8of8Year8Decrement Mid?Year8Decrement Year Census Fatalities Census Fatalities 2012 1018 23.6 1018 23.6 2013 994 23.1 994 23.1 2014 971 22.5 971 22.5 2015 949 22.0 949 22.0 2016 927 21.5 927 21.5 2017 905 21.0 905 21.0 2018 884 20.5 884 20.5 2019 864 20.0 864 20.0 2020 844 19.6 844 19.6 2021 824 19.1 824 19.1 2022 805 213 805 213 Fatalities8per81000 23.2 23.5 Average8Annual8Fatalities 21.3 21.3 Although this mortality rate is nearly three times as great as the 8.6 per 1000 for the normal population, it is still a small percentage, about 2.3 percent per year. Therefore, the discrete methods are a quite satisfactory substitute for the more exact continuous method.

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Nonetheless, HHR has assumed a rate that is higher than the typical rate for Virginia. The following table shows that Virginias Training Centers have an excellent record of preserving the lives of their residents compared to the national average.
Table&3.&Baseline&Mortality&Rates&per&1000&for&State&ICF/MRs Virginia USA Item 2009 2010 2009 2010 Average4daily4population 1,259 1,197 33,682 30,602 Number4of4deaths 28 24 870 820 Mortality4per410004population 22 20 26 27 Sources:4Larkin,Larson,4et4al.,4Residential4Services4for4Persons4with4DD,4 Univ.4of4Minnesota,420104and42012.

Since 213 fatalities among the Training Center population over the next 10 years is a statistical expectation, within 95 percent confidence there could be as many as 21 fewer deaths and more demand for Transitional Waivers. Subsequently, the Settlement Agreement was revised so that some residents could remain if their Authorized Representatives chose for them to stay. This provision of the Agreement will probably reduce the demand for Transition Waivers. b. Using Transition Waiver Slots Opened by Mortality For the HHR plan to work as designed, somewhat more than 23 residents per 1000 would have to discharge without using a Transition Waiver, and those vacating Transition Waiver slots in the community would have to be replaced by other Training Center discharges to fill those waivers. Table 4 parallels Table 3 while showing the Transition Waiver placements as a growing census in the community. Note that fatalities in the community make room for more discharges to Old Waivers. Overall, the total of the Emptying Training Center census plus the Waiver Placement census equals the original census without discharges. Similarly, the fatalities in the Training Centers plus those in the community also sum to the original number of fatalities.

2. HHR Facility Savings and Transition Waiver Slots

Facility Savings shown in the HHR Budget are the accumulated costs that would have been incurred if residents had remained in the Training Centers. Therefore, a simple way to estimate Facility Savings is to multiply the person-years in waiver placements by the portion of the Training Center rate that comes from General Funds. Similarly, Transition Waiver costs are the same number of person-years multiplied by the waiver rate for those leaving Training Centers. Table 5 shows both of these accumulations, mid-year corrections, and comparisons with the HHR Budget baseline. Facility Savings estimates agree with the HHR Budget to within 3 percent, and Transition Waiver estimates to within 6 percent. Both of these estimates can be brought into exact agreement with the HHR Budget by shifting the mid-year point to March and February respectively. 12

Table&4.&Baseline&with&Discharges&to&Transition&Waivers&in&the&Community No/Discharge/ Emptying/Training/Centers Waiver/Placements New/ Old/ Year Census Fatalities Census Fatalities Census Fatalities Waivers Waivers 2012 1018 23.6 60 1018 23.6 0 0 0.0 2013 994.4 23.1 160 934.4 21.7 1.4 60 1.4 2014 971.3 22.5 160 751.3 17.4 5.1 220 5.1 2015 948.8 22.0 90 568.8 13.2 8.8 380 8.8 2016 926.8 21.5 85 456.8 10.6 10.9 470 10.9 2017 905.3 21.0 90 350.3 8.1 12.9 555 12.9 2018 884.3 20.5 90 239.3 5.6 15.0 645 15.0 2019 863.7 20.0 35 128.7 3.0 17.1 735 17.1 2020 843.7 19.6 35 73.7 1.7 17.9 770 17.9 2021 824.1 19.1 0 19.1 0.4 18.7 805 18.7 2022 805.0 213 805 0.0 105.3 107.6 805 107.6 Fatalities/per/1000 23.2 Training/Centers 23.2 Community 23.2 Table(5.((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((( HHR(Budget(General(Fund(Items:(Facility(Savings(and(Transition(Waivers(((((( and(HHR(Budget(Anticipated(Net(Savings(from(Training(Center(Closures Facility((((((((( Tranistion( HHR(Budget(Item Savings* Waivers** GF#Portion#of#Rate#= $110,899 $52,000 Year TC#Waivers All#Waivers Costs Costs 2012 60 0 $0 $0 2013 160 60 $6,653,944 $3,120,000 2014 160 220 $24,397,795 $11,440,000 2015 90 380 $42,141,646 $19,760,000 2016 85 470 $52,122,563 $24,440,000 2017 90 555 $61,548,984 $28,860,000 2018 90 645 $71,529,900 $33,540,000 2019 35 735 $81,510,816 $38,220,000 2020 35 770 $85,392,283 $40,040,000 2021 0 805 $89,273,751 $41,860,000 Total 805 4640 $514,571,682 $241,280,000 MidEYear#Correction 403 $44,636,875 $20,930,000 Corrected#Total 5043 $559,208,558 $262,210,000 HHR#Budget#Item $573,800,000 $278,400,000 Difference#to#HHR#Budget ($14,591,442) ($16,190,000) Percent#Difference#= E3% E6% HHR#Budget#Net#savings#=#[Facility#Savings]#E#[Trainsition#Waivers] $295,400,000 *#GF#cost#is#a#0.5134#fraction#of#$216,000#Training#Center#rate#given#in# ####HHR#Senate#Finance#briefing#on#January#31,#2012. **DBHDS#adopted#current#total#cost#of#waivers#for#those#leaving# #####Training#Centers#of#$104,000#per#year#as#their#planning#baseline.## ####General#Funds#pay#half#of#each#Waiver.

From this analysis it is obvious that the net $295.4 million that HHR anticipates to gain by closing Training Center results from the difference in the Training Center 13

rate per person and the Transition Waiver rate. Section B below will analyze this anticipated difference from several perspectives.

3. Baseline Costs for Community Waivers and Family Supports

There are three separate components to HHR Budget item Community Waivers and Supports: ID waivers, DD waivers, and Family Supports. Each has a different per person rate (GF Portion of Rate) and schedule of new slots (New) in the Settlement Agreement.
Table#6.#General#Fund#Costs#of#Providing#Community#Waivers#and#Family#Supports#on#Settlement#Agreement#Schedule:#################################### Estimation#and#Comparison#with#the#HHR#Budget ID#Waivers# DD#Waivers Family#supports GF#Portion#of#Rate#= $31,855 GF#Portion#of#Rate#= $13,353 GF#Portion#of#Rate#= $3,000 Year Person###### Person###### Person###### New Costs New Costs New Costs Years Years Years 2012 275 275 $8,760,244 150 150 $2,002,965 0 0 $0 2013 225 500 $15,927,717 25 175 $2,336,792 700 700 $2,100,000 2014 225 725 $23,095,189 25 200 $2,670,620 1000 1700 $5,100,000 2015 250 975 $31,059,048 25 225 $3,004,447 1000 2700 $8,100,000 2016 275 1250 $39,819,292 25 250 $3,338,275 1000 3700 $11,100,000 2017 300 1550 $49,375,922 25 275 $3,672,102 1000 4700 $14,100,000 2018 325 1875 $59,728,938 25 300 $4,005,930 1000 5700 $17,100,000 2019 325 2200 $70,081,954 25 325 $4,339,757 1000 6700 $20,100,000 2020 355 2555 $81,390,633 50 375 $5,007,412 1000 7700 $23,100,000 2021 360 2915 $92,858,589 75 450 $6,008,895 1000 8700 $26,100,000 Total 2915 14820 $472,097,526 450 2725 $36,387,196 8700 42300 $126,900,000 MidDYear#Correction 1458 $46,429,294 225 $3,004,447 4350 $26,100,000 Corrected#GF#Total 13363 $425,668,232 2500 $33,382,749 37950 $113,850,000 ID/DD#Waivers#&#Family#Supports $572,900,981 HHR#Budget#Item $575,400,000 Difference#= ($2,499,019) Percent#= D0.4%

Estimates for these three community benefits combined predict the HHR Budget within 0.4 percent. This completes the comparison with the HHR Budget showing that HHR and DBHDS sources provide sufficient information to reconstruct the largest contributions.

B. No Facility Savings from Transition Costs


If the Transition Waiver rates and other associated government costs equal or exceed the Training Center rates, then discharging a resident from a Training Center to the community would have no economic benefit. There is ample evidence that transition costs would in fact equal or exceed Training Center placement costs if the quality of community supports were comparable. But there is a high risk of saving costs by offering much inferior supports in community placements. This risk might explain the greater mortality rates observed in the community for those with comparable levels of disability.

1. No Savings for Transition with Comparable Supports

As best this analysis could discern, the HHR/DBHDS employs the most optimistic annual waiver rates for their estimate of community costs and pessimistic rates to estimate Training Center costs. More realistic expectations would be that Transition 14

Waivers would cost as much as Training Center placements, on net eliminating any savings from transitioning residents. a. Community Costs Will Be Higher than the HHR Budget Assumed A host of reasons indicate that Transition Waivers are likely to cost as much as Training Center placements. The HHR planners mistakenly used current waiver cost of $104,000 for discharging a resident from a Training Center as representative of the waiver cost for all future discharges.6 To date, those able to find community placements within the current waiver limitations systematically represent a population with less involved conditions. For example, many residents of Training Centers are there because they found refuge after failing to be successfully supported in the community as a result of health or behavioral issues. The current waiver is inadequate for those in Training Centers with the more involved conditions. As early as October 17, 2007, DBHDS submitted a report to the Governor listing the deficiencies of the current Waiver.7 The summary has already quoted DBHDS from the Item 314 E. report, Northern Virginia Training Center Diversion Pilot, dated 2010 expressing the inadequacy of current waivers. More recently, Secretary Hazels April 17, 2012, letter to Mr. Martin Nohe, Chairman of the Northern Virginia Regional Commission, stated, I want to assure you that the Governor and I are committed to restructuring the Medicaid waiver programs that currently serve individuals with intellectual and developmental disabilities. Two of these sources predated the HHR Budget Briefing to Senate Finance on January 31, 2012, that made the general assumption, Medicaid waiver structure and provider rates do not change. The HHS Budget briefing also assumed a cap on community service costs of $138,000 per person per year. Inclusion of this figure implicitly recognizes that some people moving from the Training Centers will require an ICF level of care, which is permissible under the Settlement Agreement. Later, a DBHDS briefing and another report verified that this cost represents a 2010 average for existing community ICFs.8 Since many of community ICFs will not accept TC residents with complex conditions, for example, those who are not mobile, this cost cap is unreasonably low. Recent academic analysis cites per person costs as $251,000 for community ICFs with 15 or fewer persons in Virginia, and an average of $217,000 for community ICFs of all sizes.9

6 Slide 4 of Secretary Hazels briefing, Update on Virginias Settlement Agreement with the U.S.
Department of Justice, to the Joint Commission on Health Care, September 18, 2012. 7 Plan for Elimination of Waiting List under Medicaid: ID & Individual Family DD Supports Waivers, Office of the Governor, October 1, 2009. 8 Also on slide 4 of Secretary Hazels September 2012 briefing and Virginia Board for People with Disabilities, Assessment of the Disability Services System in Virginia, June 2011. 9 Braddock, Hemp, Rizzolo Haffer, Tanis, and Wu. The State of the States in Developmental Disabilities 2011, Dept. of Psychiatry and Coleman Institute for Cognitive Disabilities, University of Colorado, 2011.

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Peer-reviewed academic research shows there is no discernable savings from transferring Training Center residents to community placements.10 Walsh et al. point out that many costs are shifted to other General Fund or local budgets and therefore hidden from the simple comparison of waiver to Training Center placement. Private vendors such as Resources for Independence of Virginia (RIVA) estimate it would require $600 to $650 per day ($219,000 to $237,250 per year) to support many that live in Northern Virginia Training Center if they moved to the community.

b. Training Centers Costs Will Be Lower than the HHR Budget Assumed Two reasons suggest the HHR Budget baseline costs for Training Center placements are inflated. While the HHR Budget briefing told Senate Finance the average cost of a Training Center placement was $216,000 per person per year, a DBHDS briefing to Senate Education and Health Committee 1 year earlier gave the average cost as $181,000, while the $216,000 figure was just for NVTC.11 The Department of Justice used other sources to cite a state average of $195,000 that corresponds in time with the $138,000 figure quoted by HHR Budget briefing for a cap on community costs.12 Adopting the 2010 annual Training Center rate of $181,000 per year, to be consistent with the other rates in the HHR Budget, would reduce the Facility Savings by $161.0 million, hence increasing the HHR estimate of new general funding by 47 percent. DBHDS has not considered or implemented options for reducing the costs of operating Training Centers. For example, DBHDS did not even comment on the Northern Virginia Regional Plan worked out by a broad coalition of community and Training Center staff and parents to save money while preserving the quality of supports. 13 The rates at NVTC are artificially high because they include 11 new discharge officer positions to be paid by taking $700,000 from the NVTC budget, non- essential positions that provide no care to residents. Similar positions at some other training centers also artificially increase center costs.

10 Kevin K. Walsh, Theodore A. Kastner, and Regina Gentlesk Green, Mental Retardation, Vol. 41, No. 2: 103-122 (April 2003). 11 James, W. Stewart, Major Issues Facing the Commonwealths Behavioral Health and

Developmental Services System, a presentation to the Joint Meeting of the Senate Education & Health Committee and the House Health, Welfare & Institutions Committee Virginia General Assembly, January 2011. 12 Assessment of Disability Services in Virginia, Virginia Board for People with Disabilities, June 2011. 13 Recommendations for service delivery within HPR Region II to enhance services for individuals with intellectual disabilities through collaboration, NVTC, CSBs, and others, November 19, 2010.

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2. Savings from Reduced Supports

Unfortunately, the costs of transitioning people from Training Centers to community Waivers could also be saved by restricting or limiting access to essential services. These savings almost certainly would lead to the higher mortality rates. a. Reduction in Services There is little latitude for reducing NVTC costs without reducing professional and direct staff supports. For example, personnel costs account for 83.8 percent of the NVTC budget, and another 8.9 percent goes toward vocational placements, food, medical, and other supplies; see Table 7 below. At least 90 percent of staff cost goes toward supports to residents since professional staff wages are much greater than support staff; see Table 8 below. Together about 84 percent of all NVTC costs are essential to supporting resident services. The remaining overhead for a single facility cannot be excessive relative to the management of many small, dispersed community residential and support sites. The profile of costs at the other Training Centers is likely similar. Transportation costs associated with community supports should more than offset the unavoidable overhead costs of running a Training Center campus. In North Carolina, their START crisis management program similar to the one Virginia is implementing finds statewide that 24 percent of coordinators time is spent in travel.14 Time is spent covering the long distances in rural areas and fighting traffic congestion in urban areas. For professionals such as nurses, who would need to travel to clients, community placements must also absorb this overhead cost. Generalizing this specific finding to all other professional services quantifies the obvious fact that access to services involves significant travel time, either by the professional or a driver and attendant with the client. b. Reasons to Expect Higher Mortality in the Community Experiences across the country and in Virginia underscore the higher risks of mortality in the community and provide some insight into the reasons why. Common sense and findings from the study of human behavior reveal the challenges that a system of community supports face in comparison to the natural protections offered by Training Center environments. National News Reports: Investigative newspaper articles in Washington, D.C. by Katherine Boo, 1999, and in New York by Hakim and Buettner, 2011, who found, more than 1,200 (deaths in group homes) in the past decade have been attributed to either unnatural or unknown causes, as well as massive abuse, neglect, and deaths of people with ID living in group homes in those areas. In New York, it required a gut-wrenching news article to bring these travesties to the publics attention. This illustrates the political dilemma faced by agencies charged with protecting the most vulnerable among us: they must aggressively

14 North Carolina Systematic, Therapeutic, Assessment, Respite and Treatment program (NC START)
Annual Report, January 2010 June 2011, published by the NC START Central, East and West Teams, October 2011.

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investigate themselves to maintain reasonable levels of protection from abuse and neglect.

Table37.3NVTC3Budget3for32011 Item Personnel Contracting*and*Information*Technology Off*Campus*Vocational*Placements Food,*Medical*and*Other*Supplies Insurance Utilities*and*Equipment*Rentals Life*and*Safety*Code*Costs Equipment*Purchases Total Total*NVTC*buget*is*$36.4*million.

Percent 83.8% 3.8% 4.2% 4.7% 1.0% 1.8% 0.4% 0.4% 100.1%

Table&8.&Staffing&at&Northern&Virginia&Training&Center&as&of&December&2011 Personnel(Category Number Percent Degreed(/(Licensed(Professionals 76 16% Direct(Support(Professionals 266 55% Administration/Management(Personnel 63 13% Support(Personnel((housekeeping,(maintenance,(dining,(security) 82 17% Total 487 100%

Virginia Oversight: In 2011, Mr. Tuggle was scalded by accident and later died as a result of his burns because the group home manager was not willing to send Mr. Tuggle to the hospital, presumably to cover up the accidental harm. This example illustrates why self-report is untrustworthy as a primary basis for oversight and underscores what common sense would suggest.15 Transition Risks: A court-ordered closure of the Beatrice State Developmental Center in Nebraska led to 12 deaths in 25 months among the 47 in fragile health who were discharged. This mortality rate is 20 times that in the previous year at Beatrice and 10 times that in Virginias Training Centers.16 The dispersion and small size of community residential units creates structural barriers to providing an intensive, responsive, and safe system of supports.

verdict of group home owner responsible for abuse, neglect, and death of intellectually disabled victim. 16 Dr. Ted Kastner, private communication.

Dispersion of those receiving services precludes the easy monitoring from frequent short visits by professional staff, and the time delays of travel by 15 Press release from Attorney General Cuccinelli, II, filed May 25, 2012, Cuccinelli announces guilty

18

professionals leave direct care staff on their own to solve problems or having to rely on telecommunication links, both of which pose a barrier to accessing real help. Travel delays and overwhelmed on-site staff without backup exacerbate risks in life threatening situations if multiple emergencies occur at once. Implementing effective oversight in the community is virtually impossible since monitoring relies primarily on self-report by providers. Of course, some providers would diligently report problems and offer exceptional services, but the providers or staff posing the greatest risks to residents can also be expected to avoid candid reporting. The accidental death of Mr. Tuggle illustrates this obvious dilemma for those in oversight. More frequent unannounced inspections would help, but these are unlikely to deter abuse, neglect, or accidents as hoped.17 The best protection from abuse, neglect, or accident is having more than one staff person on site at all times to observe an infraction or provide backup if one resident has an emergency. Training Centers and some larger community facilities meet this condition, but smaller community placements do not.

c. Higher Mortality in the Community Experience with community services and peer-reviewed scientific research show that there are higher mortality rates in the community for those with the levels of disability typical of most of todays residents of Training Centers. Modeling provides a means of quantifying this for the HHR plan. The most significant impact of higher mortality in the community is an expected net 74 more fatalities than if current residents were permitted to remain in Training Centers, fully 35 percent more. Strauss, Kastner, and Shavelle conducted the largest academic study comparing mortality in state operated ICFs with the full spectrum of community placements.18 They employed appropriate statistical methods and analyzed 131,152 person-years of data. They stratified their comparison according to comparable degrees of disability along two scales: mobility and self-care skills. Only 10 percent of those in the community had significant disabilities were more than half way up on a four- category scale on either of the two disability scales. Fully 51 percent of state ICF residents were more than half way up on one or the other disability scale. Strauss et al. concluded that if the state ICF residents had been living in the community they would have a 72 percent higher mortality rate than in their present institutional placement. 17 Deterrence does not take effect until the likelihood of being caught rises above a deterrence
threshold that depends upon the severity of the penalty. Conducting the research to find the threshold is difficult, but from fisheries violations by scofflaws, monitoring would have to approach a few percent of all on-the-job time hardly practical with periodic visits. Refer to Anthony, A Calibrated Model of the Psychology of Deterrence, United Nations, Bulletin on Narcotics, vol. LVI, Nos. 1 and 2, 2004. 18 Strauss, Kastner, and Shavelle. Mortality of Adults with DD in California Institutions and Community Care 1985 1994, Mental Retardation, October 1998.

19

Although the study was conducted in California over 17 years ago, subsequent studies of more modest scale also achieving a level of statistical significance have consistently found an elevated rate of mortality in the community.19 Support practices have probably improved since this 1998 study, but the level of disability of those in Training Centers has also increased as those who were better suited for community placements have left. Risks of mortality went from 16.1 per 1000 for the state-run ICFs in California during the period 1985 to 1994 to 30 per 1000 in 2010. In Virginia, mortality in Training Centers are high but significantly lower than in California, 22 to 20 per 1000 for in 2009 and 2010 respectively. Since in the California study found that those with the no self-care skill or mobility had 2.5 times higher mortality in the community, it is reasonable to adopt the 72 percent higher mortality rate for community placements in Virginia. This rate differential facilitates modeling the mortality implications of closing Training Centers in Virginia over the 10 years of the Settlement Agreement. Table 9 shows the impact of a 72 percent higher mortality rate in the community on the expected number of deaths of former Training Center residents after discharge. Pale purple background color emphasizes the early emptying of the Training Centers by 2021 leaving the remaining 35 Transition Waiver slots to be filled by people from the waiting list. Pale red highlights the total number of fatalities without discharges from Training Centers (213) and with discharges according to the Settlement Agreement schedule (287). The difference of 74 excess deaths is 35 percent more than if Training Center residents had remained in place. From this analysis, many parents, guardians, and Authorized Representatives realistically understand that a move from a Training Center placement to the community is life-threatening decision. The DBHDS has not conducted and published scientifically sound analysis to assess the mortality impacts of their plans nor have they made public any plans to do so during the implementation of the Settlement Agreement. Without scientifically valid research methods applied to the mortality experienced among this vulnerable population of people with ID/DD, small numbers of needless deaths go unnoticed, and there are no substantive standards for maintaining quality supports. The DBHDS could do the following to maintain standards and visibility of the needs of this vulnerable population:

19 Subsequent research has found higher mortality in the community according to private
communication with one of the authors, Dr. Kastner.

20

Table&9.&Impact&of&the&Scheduled&Transition&from&Training&Centers&to&Waiver&Placements&on&Expected&Mortality No/Discharge Training/Centers Waiver/Placements Grand/Total/Check New/ Old/ Year Census Fatalities Census Fatalities Census Fatalities Census Fatalities Waivers Waivers 2012 1018 23.6 60 1018 23.6 0 0 0.0 1018 23.6 2013 994.4 23.1 160 934.4 21.7 2.4 60 2.4 994.4 24.1 2014 971.3 22.5 160 750.3 17.4 8.8 220 8.8 970.3 26.2 2015 948.8 22.0 90 564.1 13.1 15.2 380 15.2 944.1 28.3 2016 926.8 21.5 85 445.9 10.3 18.8 470 18.8 915.9 29.1 2017 905.3 21.0 90 331.8 7.7 22.1 555 22.1 886.8 29.8 2018 884.3 20.5 90 211.9 4.9 25.7 645 25.7 856.9 30.7 2019 863.7 20.0 35 91.3 2.1 29.3 735 29.3 826.3 31.4 2020 843.7 19.6 35 24.8 0.6 30.7 770 30.7 794.8 31.3 2021 824.1 19.1 0 0.0 0.0 32.1 805 32.1 805.0 32.1 2022 805.0 213 805 0.0 101.4 185.2 805 185.2 805.0 287 Fatalities/1000 23.2 Fatalities/1000 23.2 Fatalities/1000 39.9 Ratio/of/mortality/(Waiver/slots///Training/Centers)/= 1.72 Excess/mortality/=/(287/M/213)/=/ 74 Color/Codes: Impact/on/schedule:/Early/emptying Impact/on/mortality:/Excess/Fatalities

Implement scientifically validated reviews of mortality: Analyze mortality according to recognized risk factors and search for other risk factors. Publish these findings in peer-reviewed journals to establish the independence of the reviews from political or administrative pressures. Provide time to recognize excess fatalities during the transition: Using Fishers exact method to compute the chance of the excess number of fatalities happening by chance, this analysis found that it would take 2 years before that chance would exceed the scientifically accepted standard of 1:20 odds. This slowing down the rate of discharges from Training Centers would provide time to analyze community performance. Provide public accountability to assure parents, guardians, and Authorized Representatives: Publicly release the results of these analyses and statistical findings and other measures of the effectiveness of the supports for those with ID/DD. Most people with ID/DD will outlive their parents, and a system of public accountability is partial assurance that the needs of these most vulnerable citizens, who cannot advocate for themselves, will be met.

3. Tabular Summary of Real Budget Savings

Table 10 consolidates the HHR Budget items scattered throughout the HHR Budget briefing into a single list, given in the first column. The Realistic Baseline column eliminates the gap between Training Center and community waiver rates, hence eliminating the artificial $295.4 million that DBHDS anticipates. The Training Centers Remain Open column shows the simplified case of leaving all 2012 residents in place, which yields a real $89.2 million savings relative to the realistic baseline. If a small percentage of current Training Center residents choose community placements and a few staff have relocated, it should not substantially affect this real savings.

21

Table)10.)Cost)Savings)by)Leaving)Training)Centers)Open)))))))))))))))))))))))))))))))))))))))))))))))))))))))))) When)Compared)with)Realistic)Baseline)Costs
HHR)Budget)Items Transition)Waiver)Slots !for!TC WTA/Other !TC!employee!transition Facility)Savings Community)Waivers)and)Supports Crisis)Programs* Waiver)Administration* Quality)Management* FY)2012)Trust)Fund)Deposit** FY)2012)Items)in)Base** Total)New)General)Funds HHR)Briefing) Baseline $278.4 $89.2 ($573.8) $575.4 $120.0 $26.1 $25.1 ($30.0) ($169.8) $340.6 Realistic) Training)Centers) Baseline Remain)Open $573.8 $0.0 $89.2 $0.0 ($573.8) $0.0 $575.4 $575.4 $120.0 $120.0 $26.1 $26.1 $25.1 $25.1 ($30.0) ($30.0) ($169.8) ($169.8) $636.0 $546.8

Difference!to!HHR!Briefing!baseline $0.0 $295.4 $206.2 Percentage!excess!over!HHR!Baseline 87% 61% Difference!to!realistic!baseline $0.0 ($89.2) Percentage!excess!over!HHR!Baseline J26% Color!Key: !Trace!Requires!Modeling !Changed!from!Baseline !Baseline!Reference !More!Realistic!Baseline !Savings!with!Training!Centers *!!Required!by!the!Settlement!Agreement!and!not!analyzed!further!here. **!Already!committed!General!Funds!and!not!analyzed!further!here The!net!total!for!all!items!designated!by!(*)!and!(**)!is!$28.6!million!of!credit !toward!other!costs.

C. Training Center Size and Location


Parents, siblings, family, guardians, and other Authorized Representatives generally wish to have their loved ones nearby. Furthermore, parties concerned with the welfare of Training Center residents have not been provided any economic or substantive reasons with supporting evidence for the urgent schedule of Training Center closings or closings rather than downsizing.

1. Reasons to Delay Closures

Counter to their planners assumptions, DBHDS now knows that the community will not be ready to accept those with the most challenging conditions before the scheduled closures of SVTC in 2014 and NVTC in 2015. Nonetheless, DBHDS claims it must show progress by adhering to the scheduled closure dates. If so, this would force parents and Authorized Representatives to choose between accepting inadequate community placements nearby or watching their loved ones being relocated to a remote Training Centers elsewhere in the state.20 The DBHDS 20 These points came out during a meeting between NVTC Parents and Associates meeting with Secretary Hazel on November 16, 2012. 22

should either present compelling substantive reasons for closing SVTC and NVTC before the community is ready or delay the closings until the community has demonstrated it is adequately prepared to accept those to be discharged.

2. Reasons to Maintain a Smaller Training Center in Each Region

Surveys at CVTC and NVTC reveal that over 95 percent of Authorized Representatives of current Training Center residents want their loved ones to remain where they are. During the restructuring of SEVTC, a substantial majority of the Authorized Representatives elected for their residents to remain in the new raining Center placements. The prospect of a large fraction of current Training Center residents not choosing to transition is also counter to the assumptions of the DBHDS planners. If a large fraction of current Training Center residents were to remain in Training Centers, this analysis cannot identify any substantive advantages to consolidating of those residents into fewer centers rather than sustaining smaller centers in each region of the state. Health and Human Resources has already argued that quite small ICF/MRs are practical to consider. By this logic, it should support the preservation of somewhat downsized Training Centers in each Region of Virginia. Slide 3 of the HHR Budget briefing states that, The annual statewide average community cost is $138,000 per person for those with comparable care needs as Training Center residents, and slide 4 of HHRs recent update briefing acknowledges that they are referring to community Intermediate Care Facilities.21 Although this analysis pointed out reasons that community ICF rates are unlikely to cover Training Center resident needs, DBHDS nonetheless made the argument that smaller ICF/MRs are practical. In Virginia, the community ICF/MRs is generally small, averaging 10.7 beds each.22 The best interests of Training Center residents and their family and friends argues that the residents should be supported in nearby locations, irrespective of local labor rates and land values. If transitioned to the community, those placements would cost more simply because land values and wages are higher in more prosperous regions. Residents of more expensive regions contribute their fair share to the wealth of the Commonwealth and should be able to enjoy their fair share of state services.

21 Secretary William Hazel, Health and Human Services Presentation to Senate Finance, January 31, 2012, and Update on Virginias Settlement Agreement with the U.S. Department of Justice, briefing to the Joint Commission on Health Care, September 18, 2012 22 Virginia Board for People with Disabilities, Assessment of the Disability Services System in
Virginia, page 262, June 2011.

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D. Restoring the Rate of New Waiver Creation


Advocates of expanding community supports are likely to pressure the General Assembly to restore the increase in new Waivers that they received in recent years.

1. Pressures for More New Waivers

The number of new community ID Waivers required by the Settlement Agreement averages 291 per year, many fewer than the 360 per year average that advocates have been able to obtain from 2003 thru 2010; see Table 11.23 Furthermore, An Act relating to elimination of waiting lists for the Mental Retardation Medicaid Waiver and Individual and Family Developmental Disabilities and Support Medicaid Waiver within 10 years, approved in March, 2009, specifies funding at least 400 new waivers each year.24 The Governors report cited above shows that it would require as many as 1,100 new waivers per year to eliminate the waiting list in 10 years. Approximately half that, 550 per year, would be required to eliminate just the urgent waiting list. With 5,932 people on the waiting list, its annual growth rate is 699/5,932 = 12 percent per year.

Table&11.&Established&Rate&for&New&&&&&&&&&&&&&&&&&&&&&&&&&&& ID&and&DD&Waivers&in&Virginia Year ID'slots DD'slots 2003 150 0 2004 175 0 2005 860 105 2006 0 0 2007 303 65 2008 468 100 2009 710 15 2010 210 15 Average 360 38

2. Cumulative Costs of ID Waivers


Using the same methods as before, Table 12 shows the cumulative costs of providing 360 new ID waivers each year or 400 new waivers yearly. Table 12 shows the General Fund costs for the smaller 2010 baseline ID waiver rates. The following points put this result in perspective: 360 new ID waivers per year would increase the Community Waivers and Supports item of the HHR Budget by $145.2 million, or 25 percent. 400 new ID waivers per year would increase the HHR Budget item by $208.9 million, or 36 percent.

Family Developmental Disabilities Supports Waivers, Office of the Governor, October 1, 2009. 24 2009 Acts of Assembly Chapter 228/ Chapter 303.

23 Plan for the Elimination of Waiting Lists under Medicaid: Intellectual Disabilities & Individual and

24

360 new waivers per year would increase the HHR Budget new General Funds by 43 percent, and 400 new waivers per year would increase it by 61 percent. If all of the Transition Waivers became new ID waivers for the community, over 10 years this would be 2,915 + 805 = 3,720, which is only slightly larger than 360 x 1,000 = 3,600 restoring the historical pace of new ID waiver creation.
Table(12.(General(Fund(Costs(of(Increasing(the(Number(of(New(ID(Waivers(per(Year Typical(Number(2003(2(2010 GF#Portion#of#Rate#= $31,855 Person###### New Costs Years Legislated(Promise GF#Portion#of#Rate#= $31,855 Person###### New Costs Years $12,742,173 $25,484,347 $38,226,520 $50,968,694 $63,710,867 $76,453,041 $89,195,214 $101,937,388 $114,679,561 $127,421,734 $700,819,540 $63,710,867 $637,108,672 $784,341,421 Difference#= $208,941,421 Percent#Difference#= 36% 400 400 400 400 400 400 400 400 400 400 4000 400 800 1200 1600 2000 2400 2800 3200 3600 4000 22000 2000 20000

Year 2012 2013 2014 2015

360 360 $11,467,956 360 720 $22,935,912 360 1080 $34,403,868 360 1440 $45,871,824 2016 360 1800 $57,339,781 2017 360 2160 $68,807,737 2018 360 2520 $80,275,693 2019 360 2880 $91,743,649 2020 360 3240 $103,211,605 2021 360 3600 $114,679,561 Total 3600 19800 $630,737,586 MidDYear#Correction 1800 $57,339,781 Corrected#GF#Total 18000 $573,397,805 ID/DD#Waivers#&#Family#Supports $720,630,554 Difference#= $145,230,554 Percent#Difference#= 25%

E. Underlying Baseline for HHR Budget


The HHR Budget represents the marginal change from a baseline of maintaining individuals now on waivers and now in Training Centers, plus the cost of new waiver slots included in the Settlement Agreement over the period from January 1, 2012 through the end of December 2021. This underlying baseline is very large and managing its aggregate costs has implications for keeping Training Centers open or not. Specifically, the baseline dominates the renegotiation of the waiver to cover current Training Center resident needs, and it reveals the possible value of Training Centers in cost containment.

1. Size of the Underlying Baseline

Table 13 shows the hidden baseline of General Funds as well as the new money for supporting the provisions of the Settlement Agreement but without Training Center

25

closures. Since Training Center rates of the HHR Budget baseline were for 2012, the ID and DD waiver costs employed for Table 13 were also brought up to the 2012 levels reported in the HHR Update briefing. Maintaining currently funded waivers for 10 years costs 10 times the cost of maintaining all those on waivers for 2012. Person-years for Training Center residents diminish with mortality assuming a there would be no new admissions. With these assumptions, the underlying baseline is approximately $4.5 billion and consumes 87 percent of the total projected budget for supports to those with ID/DD. At best, HHR could expect to save only 6 percent through Training Center closures. Waiver rates have four times more impact on the total budget than Training Center rates, even with Training Centers remaining open. This is because 80 percent of the total costs are from waivers, and total waiver costs are proportional to the average waiver rate.

2. Impact of Waiver Cost Inflation

From 2000 to 2010, ID waiver costs inflated at an average rate of 8.1 percent per year. Although ID waiver inflation might have leveled off now, it is more likely that waiver charges have reached their current limit authorized by the General Assembly. Restructuring the ID waiver and increasing salary caps to competitive wages promises to continue the 8.1 percent growth rate. The following points should be important to planners: 8.1 percent growth more than doubles the underlying rate in the 9 years 2012 to 2021. Accumulated costs increase 66 percent for the Settlement Agreement schedule of new ID waivers, $339.5 million more than without the inflation. Accumulated costs increase the underlying baseline of ID waivers of $3.3 billion by $1.5 billion, or 46 percent. Total ID waiver costs increase by $1.9 billion or 48 percent over their $3.9 billion baseline without inflation.

These numbers show that the impact of potential inflation on just the ID waiver dwarfs the other cost considerations. Community costs of the underlying baseline would likely dominate deliberations over the expansion of waiver services, subordinating Training Center resident needs. This subordination is likely although the needs of most residents transitioning from Training Centers into the community helped initiate the renegotiation since most residents require restructuring and expanding ID waiver coverage. Also, future cost-containment measures might well place caps on services. Cost constraints would fall most heavily on those with the greatest needs and most vulnerability, including those who have transitioned into the community.

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Table&13.&10+Year&Budget&for&HHR&Underlying&Baseline&and&New&Settlement&Agreement&Requirements&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&& Number'in' Person0Years' Annual'Cost'to' 100Year'''''''''''''''''''' Percent'''''''''''''''''''' 2012 for'10'Years General'Fund GF'Costs of'Costs ID'Underlying 8,621 86,210 $3,339,988,387 65% $38,742 New'ID SA'Schedule 13,363 $517,696,263 10% DD'Underlying* 584 5,840 $93,909,600 2% $16,080 New'DD SA'Schedule 2,500 $40,201,027 1% New'Family' SA'Schedule 37,950 $3,000 $113,850,000 2% Supports Training''''''''' 1,018 9,074 $115,124 $1,044,616,989 20% Centers Other'New'Funds'for'the'Settlement'Agreement ($28,600,000) 01% HHR'Underlying'Baseline'Costs $4,478,514,975 87% New'GF'for'Community'Waivers'and'Family'Supports $671,747,290 13% 80% Leverage'of'Increased'Waiver'Rates $4,105,645,277 Leverage'of'Increased'Training'Center'Rates $1,044,616,989 20% Total'General'Funds $5,150,262,266 100% 6% HHR'Budget'Net'"Savings"by'Closing'Training'Centers $295,400,000 Training'Center'and'ID'waiver'census:'Quarterly'Report'of'Office'Activities,'DBHDS,'for'Oct.0Dec.'2011.'' *DD'Waiver'census:'Virginia'Board'for'People'with'Disabilities'2011'Assessment'(2009'data). ID'Waiver'cost'of'$75,465:'HHR'briefing'to'Joint'commission'on'Health'Care,'September'18,'2012, '''entitled,'Update'on'Virginia's'Settlement'Agreement'with'the'U.S.'Department'of'Justice *DD'Waiver'costs'of'$37,768:'Virginia'Board'for'People'with'Disabilities'2011'Assessment'(2009'data) Family'Supports'annual'cost'from'private'communications. Training'Center'annual'costs'of'$224,245:'HHR'Update'briefing,'September'2012 Credit'of'$28.6'million'for'the'net'of'additional'cost'requirements

3. Value of Training Centers for Cost Containment

Those with the greatest disability or challenging behavioral issues are the most vulnerable and problematic. For them, safety and medical care considerations must be paramount in shaping their system of supports. These will also be the most expensive few in the population of those with ID/DD, and managing the costs of their care helps contain overall costs. Training Centers offer an alternative model for providing supports to those with ID/DD a medical model rather than a managed care supports model. Preservation of a significant Training Center population provides a baseline against which to measure the performance of supports for those with the greatest mortality risk. Comparisons with those on ID waiver for cost and outcomes could reveal opportunities for savings in the community system. Training Centers offer an efficient means of providing professional staff supports to residents and are probably less expensive for those with the greatest vulnerability and most challenging medical needs or behaviors. As an example of an economy of scale, Training Centers efficiently use nursing support. As our nation faces a nursing shortage, Training Centers can operate with a 30:1 resident-to-nurse ratio made possible by an integrated team approach with licensed practical nurses filling in less demanding roles. In the community, group homes with only four beds, or even somewhat larger congregate units, could not provide on-site nursing support in a cost competitive 27

manner. Cost effective nursing support would only available by phone, with about an hours travel delay, or at a Training-Center-like crisis stabilization center. Training Centers are a place to train staff and develop best practices. Internships often lead to professionals adopting careers in providing services and other supports to those with ID/DD. Opportunities for young professionals to experience the challenges and rewards of providing care helps recruit those with critical skills at affordable rates.

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Attachment I: Qualifications of Robert W. Anthony, Ph.D.

Overall, Dr. Anthonys career was devoted to public service working for non-profit organizations whose missions were to determine whether government programs were likely to accomplish their intended goals. In his career, Dr. Anthony has been expected to objectively analyze the broad prospects of program effectiveness that call for a breadth of background that spans beyond the expertise of individuals managing or conducting specific programs. Dr. Anthony received his Ph.D. in physics from the University of Michigan in 1971 and proceeded to apply his analytical skills to studying and forecasting the unexpected and unintended impacts of technology on society in the applied policy field of Technology Assessment. Among other studies, Dr. Anthony analyzed the delivery of social services in rural areas through transportation and communication technologies, public lack of acceptance of nuclear power and waste disposal options, and issues involving multiple stakeholders in the energy and materials sectors. Dr. Anthony consulted with the Congressional Office of Technology Assessment, testified before Congress, as well as worked on competitive research grants won from the National Science Foundation and other Federal agencies and commissions. From 1982 onward, Dr. Anthony primarily supported the Office of the Secretary of Defense in the oversight of operational testing of military systems. In these efforts, he evaluated the technological, psychological, and organizational aspects of performance. Key to this was identifying the critical operational issues, that is, what mattered most to accomplishing the mission. During this period, Dr. Anthony also analyzed counter drug operations and counter insurgency operations. This work led to an understanding of these clandestine distribution and attack networks. In addition, he developed and calibrated a model of the psychology of deterrence with real operational data.

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