Material presented to the Governor's Budget Office by the BH/ID/A Coalition lobbying team prior to the March 8th budget address

1. Protecting Vulnerable Pennsylvanians
by
Preserving Services for People with
Mental Illness, Substance Use Disorder,
Intellectual Disabilities and Autism

2. Funding for Community-based Behavioral Health and
Intellectual Disability Services Has Already Been Cut,
and Cut, and Cut.
 Payment rates for these services have not kept pace with (a)
inflation (CPI), (b) the Home Health Market Basket Index, or
(c) the State General Fund over the past two decades. See
Chart 1 attached.
 Over the past twenty years, payment rates for these services
have been cut 40% compared to the cost of providing these
services.
 Over the past eight years, the Governor proposed cost-of-
living adjustments to these payment rates in only three of the
last eight years. In both FY 2005 and FY 2009, the
Legislature added funding for payment rate increases at less
than inflation. See Chart 2 attached.
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3. Over the Past 20 Years, BH/ID/A Reimbursement Lags Far
Behind Increases in the State General Fund and in Inflation
160.00%
140.00%
State
General
Fund
120.00%
Cumulative Percentage Change
100.00%
HHMBI
80.00%
CPI-U
(Seasonally
60.00% Adj)
40.00%
BH/ID/A
Reimbursement
20.00%
0.00%
90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11
State General Fund 0.00% 12.89% 14.20% 21.10% 26.19% 30.58% 32.57% 39.03% 45.70% 55.21% 60.85% 67.21% 66.76% 72.78% 85.41% 97.25% 111.95 119.02 128.03 124.38 133.71
HHMBI 0.00% 4.75% 7.82% 12.12% 15.34% 18.40% 21.47% 24.85% 28.68% 32.52% 37.42% 43.10% 48.01% 52.61% 57.67% 62.42% 67.48% 73.31% 79.14% 82.52% 87.12%
CPI-U (Seasonally Adj) 0.00% 3.01% 6.10% 8.75% 12.06% 15.22% 17.79% 19.71% 22.06% 26.62% 30.66% 32.06% 34.63% 38.90% 42.43% 48.46% 52.35% 59.76% 57.76% 59.51% 63.61%
BH/ID/A Reimbursement 0.00% 3.00% 5.06% 7.16% 9.30% 9.30% 9.30% 11.49% 13.72% 15.99% 18.31% 20.68% 20.68% 20.68% 23.09% 25.56% 28.07% 31.91% 33.23% 33.23% 33.23%
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4. BH/ID COLAs by Fiscal Year
Actual Compared to HHMBI
Fiscal
MH/MR COLA HHMBI** Difference
Year
93-94 0.00% 0.00% 0.00%
94-95 2.00% 2.83% -0.83%
95-96 0.00% 2.75% -3.66%
96-97 0.00% 2.59% -6.39%
97-98 2.00% 3.15% -7.77%
98-99 2.00% 2.88% -8.91%
99-00 2.00% 3.73% -11.08%
00-01 2.00% 4.25% -13.98%
01-02 2.00% 3.45% -16.06%
02-03 0.00% 3.18% -20.15%
03-04 0.00% 3.31% -24.55%
04-05 2.00% 2.99% -26.40%
05-06 2.00% 3.45% -28.97%
06-07 2.00% 3.40% -31.60%
07-08 3.00% 3.30% -33.01%
08-09 1.00% 3.00% -37.69%
09-10 0.00% 2.00% -39.67%
10-11 0.00% 2.10% -43.12%
**Home Health Market Basket Index.
Source: Global Insight.
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5. Payment Rates for Community-based Behavioral Health
and Intellectual Disability Services Have Lagged Behind
Other Major Medicaid Service Providers
Over the Past Twenty Years.
 Annual payment rate increases for Medicaid MCO’s and Nursing
Homes far exceeded payment rate increases for hospitals, which
exceeded the payment rate increases for home and community-
based behavioral health and intellectual disability services. See
Chart 3 attached.
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6. BH/ID/A Reimbursement Lags Well Behind the Increases in
Medicaid Payments Received by Other Major Medicaid
Providers in Pennsylvania
160.00%
MCOs
145.00%
Cumulative COLA Increase
130.00% Nursing
Homes
(Compounded)
115.00%
100.00%
85.00% State
General
70.00% Fund
55.00%
40.00% Hospitals
25.00%
BH/ID/A
Reimbursement
10.00%
-5.00%
FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
MCOs 0.00% 7.40% 10.84% 7.29% 9.44% 13.81% 23.21% 33.02% 46.96% 62.44% 69.75% 81.63% 93.25% 100.98 107.01 119.31 130.28 144.09
Nursing Homes 0.00% 10.20% 20.43% 29.04% 37.18% 45.36% 52.77% 64.96% 76.37% 88.79% 97.00% 108.04 113.86 122.42 126.86 126.86 129.13 133.26
State General Fund
0.00% 4.21% 7.45% 9.08% 14.41% 19.90% 27.73% 32.37% 37.61% 37.24% 42.19% 52.58% 62.33% 74.43% 80.25% 87.75% 66.81% 74.09%
(State $ Only)
Hospitals 0.00% 3.70% -1.49% 0.49% 3.20% 5.26% 8.21% 11.46% 15.91% 20.70% 21.91% 24.96% 27.46% 32.55% 35.20% 35.20% 35.20% 35.20%
BH/ID/A
0.00% 2.00% 2.00% 2.00% 4.04% 6.12% 8.24% 10.41% 12.62% 12.62% 12.62% 14.87% 17.17% 19.51% 23.09% 24.33% 24.33% 24.33%
Reimbursement
Source: Governor's Executive Budget
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7. The Cost of Community-based Behavioral Health and
Intellectual Disability Services is Less than Half
the Cost of State Institutions.
 The average cost per resident in state MR Centers is
$256,622 compared to the average cost of residential and
day program services in the community for people with
intellectual disabilities of $112,000, or 44% of the cost of the
mandatory Medicaid entitlement alternative. See Chart 4
attached.
 The average cost per patient in State Mental Hospitals is
$195,891 compared to the average cost of residential and
day treatment services in the community for people with
mental illness of $60,850, or 31% of the cost of care in state
institutions. See Chart 4 attached.
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8. FY 11 Average Cost per Person
State Insitutions vs. Community Programs
$300,000
$250,000
$200,000
Average Cost per Person
$150,000
$256,622
$100,000 $195,891
$112,000
$50,000
$60,850
$0
State MR Centers Community ID Programs State Mental Hospitals Community BH Programs
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9. The Cost of Direct Support Personnel is Twice as High in
State Institutions as in Community Programs.
 Based on a Legislative Budget and Finance Committee
report1, the average hourly wage for direct support
personnel in community-based programs ($8.84), is less than
half the wages paid ($17.78) in state institutions and the
difference continues to widen.
 The Average annual wage of a direct support professional in
a community setting ($18,390) is only slightly above the
federal poverty guidelines for a family of three.2
1 LBFC Report on Salary Levels and Their Impact on Quality of Care for Client Contact Workers in Community Based MH/MR
Prorgams http://lbfc.legis.state.pa.us/reports/1999/204.PDF
2 American Network of Community Options and Resources (ANCOR) 2008 Direct Support Professional Wage Study
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10. Opportunities for Cost-Shifting to Other Payers is Almost
Non-Existent.
 The state (with matching federal funds) is the single payer for
community-based behavioral health and intellectual disability
services.
 There is almost no private pay (less than 1%) for these
services.
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11. The Almost Exclusively Non-Profit Providers of these
Services are Financially Fragile.
 For 45 years, DPW payment policy and county MH/MR
agency practice severely limited retained revenue.
 County contracts, DPW fiscal regulation, and ODP
Instructions to Cost Reporting carefully limit allowable
costs.
 Cash advances from counties, and now gross
adjustments from DPW, continue to be necessary to
ensure adequate cash flow for many of these
community-based providers.
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12. Cuts in these Services will Increase Costs Elsewhere in
State and County Government.
 County jails and state prisons are among the default
treatment option for people with autism and untreated
behavioral health needs.
 Cuts that lead to program closures for people with
intellectual disabilities will result in a re-
institutionalization policy contrary to the Americans
with Disabilities Act at greater expense to the state
budget.
 The lack of adequate Waiting List funding for people with
intellectual disabilities is resulting in Section 406 commitments
to state MR institutions by county common pleas courts, at a
cost of $256,622 per person per year, which will only
accelerate if further cuts are made.
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13. Traditional Cost Cutting Measures (Serving Fewer People or
Providing Fewer Services) are Not Available
in the Community ID Waivers.
 Existing waiver participants cannot be terminated from ID
waivers, according to federal law, and there is almost no
turnover of the people enrolled in these waivers.
 The amount and kinds of services provided to ID waiver
participants cannot be cut back, according to federal rules.
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14. Medicaid Waiver Services for People with Autism
Must Be Preserved
 Two Medicaid waivers generate federal matching funds for
services for 500 adults with autism spectrum disorders.
 The preservation of these services will help to reduce costly
and inappropriate “care” for people with autism, including
county jails and state prisons.
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