ODDC- Olmstead: Reclaiming Institutionalized Lives- Ohio’s Progress, August 14, 2003

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Title: Olmstead: Reclaiming Institutionalized Lives- Ohio’s Progress, August 14, 2003

Author: National Council on Disability, (Katherine Cargill-Willis 11/26/03) www.ncd.gov/newsroom/news/r03-433. Mark Quigley or Martin Gould

Kathy’s Note: The original report is over 400 pages. I have decided to divide into four reports:

Views of people with disabilities, demographics and barriers to community integration
Ohio’s progress
Court cases and lessons learned
NCD recommendations

Ohio’s Numbers: In 2000, nearly 8,000 persons with developmental disabilities lived in large congregate facilities, including 2,430 persons in nursing facilities, 1,990 in state institutions, and 3,374 in large private ICFs/MR. In 2001, 80,930 Ohioans lived in nursing facilities, a decrease of 2.6 percent since 1996, but Ohio was still ninth state in the nation in nursing facility use when measured as a percentage of the total population age 65 or older. During this period, however, Ohio reduced the supply of nursing facility beds by 12 percent, one of the largest rates of decrease in the nation. Of the 412 people in state psychiatric institutions who had been there for more than a year, preliminary assessments show that more than 100 could be served in community settings with support.

Accomplishments and the Planning Process: Ohio’s Olmstead plan is widely regarded as a model for other states. In June 2000 Governor Taft instructed his Office of Budget and Management to coordinate a review of the state’s services systems with the Departments of Job and Family Services, Mental Health, Mental Retardation and Developmental Disabilities, Health, Aging, and Alcohol and Drug Addiction Services. The resulting plan was published on February 28, 2001. The recommendations in the plan are embedded in a vision of increased consumer self-determination and control and include:

Changing the reimbursement system for institutional care designed to slow the growth of institutional costs and allow investment of an additional $145 million in community services
Shifting funding to community services by systematically realigning financing, statutes, regulations, local infrastructure, and the support of public agencies
Working with the National Governor’s Association and other national organizations to overcome federal policy constraints
Addressing the health care workforce shortage by adopting "best practices" to increase job satisfaction
Remove policy barriers in Ohio that inhibit people with disabilities from achieving independence and personal responsibility

The Ohio plan identifies the numbers of persons in institutions (except for nursing facilities) and waiting for services and considers how existing programs can serve as a framework for developing services. It also identifies strategies for system change enabling more people with disabilities to be supported in the community and exercise informed choice.

Consumer Input: Preexisting committees from various departments gave input into development of the plan including:

The MR/DD Vision Committee
The Department of Mental Health Building Our Future Together initiative
The Department of Aging Summit on Health Care Workforce Shortage

Other input came from the Department of Job and Family Services, the Department of Aging, and ten forums organized across the state by the Ohio State Independent Living Council. The plan acknowledges that the support people need to live in the community is frequently unavailable, risking unjustified institutionalization. The plan recognizes the entire state systems must be redesigned to improve the adequacy and availability of support.

The Executive Budget: The 2002-2003 Governor’s budget expanded home-and community-based waiver programs including:

2,300 new waiver slots in FY 2002
2,600 new waiver slots in FY 2003 for elders, persons with physical disabilities, and persons with developmental disabilities
Funding for transition costs enabling 75 persons to leave nursing facilities in 2002 and 125 in 2003.

The budget bill also calls for the development of a managed care waiver for persons with mental illness. It has measures to reduce spending on nursing facilities and remove incentives to building more nursing facility beds including:

Setting separate rates for Medicaid- and Medicare-supported residents
Changing the reimbursement formula to one that divides nursing facility rates by all beds rather than basing the rate on occupied beds
Abandoning the payment of bonuses to for-profit providers on the basis of the value of their assets
Abandoning the practice of bailing out bankrupt facilities
Limiting reimbursement for depreciation.

Medicaid Redesign and Implementation: CMS’ review of Ohio’s Residential Facility Waiver caused the MR/DD Medicaid Redesign Project. The review found that Ohio’s MR/DD service system did not comply with the Medicaid requirements of freedom of choice of provider, comparability of services, and being sufficiently statewide. Faced with a lack of new funding to support the necessary changes, state officials took on the challenge of serious, systemic change in the structure and financing of Ohio’s MR/DD services. A budget bill enacted in 2001 outlined the framework for systems change and established an Executive Branch Committee (EBC) to oversee the redesign consisting of representatives from:

The governor’s office
The Department of Job and Family Services
The Department of MR/DD
The Office of Budget and Management
The Arc of Ohio
The Ohio Association of County Boards of MR/DD
Ohio Superintendents of the County Boards of MR/DD
Provider representatives
Representative of persons with MR/DD

The purpose of the budget bill was to:

Quickly free up funds by refinancing services that were totally funded by local dollars to capture the federal Medicaid match.
Submit a low-cost "basic" waiver with a cap of $5,000 per person to provide federal matching funds for people living at home with their families
Expand its Individual Options waiver to serve persons who were receiving state-funded supported living services.
The freed-up funds were to be used for infrastructure and expansion of services.

After six months of this "frontloading" of funds, people enrolled in the Residential Facility Waiver and people in waiting list priority categories would transition to a series of new or amended waivers that would comply with Medicaid requirements. Each waiver would contain an individual cost cap on services so that persons with different levels of need would be served in different waivers, with provision for easy transition between waivers for persons whose needs might change. County boards that financed MR/DD services with local funds would be designated as Medicaid local administrative authorities with responsibility to ensure that Medicaid requirements, including choice of provider, are met. Conversion to the new system began in July 2002 and is expected to take about a year.

As the redesign project proceeded, several stakeholder groups were established with specialized tasks in different aspects of implementation. The relationship between the work groups and the EBC has not been easy. The EBC had worked hard on crafting the provisions of this omnibus legislation and had a rich understanding of what was intended by the bill and why. EBC members were not totally satisfied with some of the approaches the work groups took, resulting in substantial revision of work products. These differences caused frustration between the staff and the outside parties who donated their time and energies to the work groups. EBC’s solution was to centralize responsibility for policymaking in its own subcommittees. The existing work groups’ role was reduced to carrying out specific assignments that might be made from time to time by an Executive Branch subcommittee.

After the Ohio Access plan was published, a group of disability advocates formed to work with state agencies to seek Systems Change grants from CMS. The Ohio DD Council and the Statewide Independent Living Council used the group as the beginning of a cross-disability/aging Olmstead Task Force. By March 2002, a representative from the governor’s office announced that other demands on Medicaid funds, including the statutory formula for nursing facilities and other long-term care facilities, will make it difficult for the state to expand existing Medicaid waivers or add new programs, such as the Medicaid buy-in. Ohio has an administrative rule providing that a third of the proceeds from the collection of franchise permit fees and penalties paid by nursing facilities and hospitals are to be deposited in a "home and community-based services for the aged fund" and used to fund programs for Medicaid beneficiaries, including the PASSPORT waiver for persons older than 60 who are at risk of nursing facility placement. However, in an amendment that became effective on September 30, 2002, the percentage of the fees paid into the home- and community-based services fund was reduced to 23 percent for fiscal years 2003 through 2005.

By summer 2002, some of the measures to reduce incentives for building unneeded nursing facility beds that were proposed by the governor and included in the Ohio Access plan in 2001 were still being considered by a Nursing Facility Reimbursement Council. In a hearing before the council on July 16, 2002, the director of the state Medicaid agency said 14% of nursing facility beds were unoccupied, that the present system increases per diem payments as occupancy falls, and that other aspects of the reimbursement system inflate payments. The legislators expressed concern with downsizing nursing capacity, and one suggested that empty nursing facility beds should be made available to other populations, such as people with developmental disabilities and mental illness.

In early 2003 state budget realities and the high cost of services at the state developmental centers caused Governor Taft to announce that residents of the institutions to be closed would be given choices about where they want to live, which could include the community or another state institution. However, the expectation was that most residents would move to the community.

NCD’s Concerns:
- Even with changes to the nursing home reimbursement formula, nursing facility expenditures would still increase because of automatic statutory increases of 9.6 percent and 7.5 percent in FY 2002 and 2003, respectively and the plan does not address how this requirement, which resulted in an automatic increase in nursing facility spending.
- The plan does not address the pace of transition from institutions to the community or off waiting lists, does not set timelines for movement, and does not look at the adequacy of the state’s current system of assessing institutional residents for community placement.
- The plan does not call for system change that will enable funding to follow the person.
- The plan does not examine how funding might be redirected from MR/DD institutions to community services
- When Director Ritchey testified in May 2002 that the department had begun a pilot project to assist "individuals who have a desire to leave the centers" and move to a home- and community-based setting, it was apparent that the state does not intend significant reduction of institutional populations but instead will rely on increasing efficiency to contain costs.

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