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July 19, 2019

Intellectual and Developmental Disabilities
Budget Bulletin

Yesterday morning, Governor Mike DeWine signed House Bill (HB) 166, the state’s biennial operating budget. The General Assembly did not finalize the budget until after the June 30 constitutional deadline, requiring a short-term continuing budget. Governor DeWine exercised 25 line-item vetoes of budget provisions.

This bulletin summarizes key provisions of the budget bill, as revised by the line-item vetoes, that affect service providers for individuals with intellectual and developmental disabilities.

Medicaid Waiver Reimbursement

The budget bill as passed by the General Assembly included funding for significant increases in rates for homemaker/personal care services in Department of Developmental Disabilities (DODD) waivers. The legislature added nearly $140 million more than the department requested. The legislature also included language in the bill directing the department to use specified average direct support professional wages ($12.82 starting January 1, 2020, and $13.23 starting July 1, 2020) to calculate the waiver rates.

Unfortunately, Governor DeWine vetoed the language with the wage rates, although the funding remains in the budget. DODD Director Jeff confirmed to OHCA that the department’s intent is to proceed with the rate increases in same manner as previously planned, notwithstanding the veto, which was based on opposition to rates in statute, not opposition to increasing waiver rates.

Similarly, the funding in HB 166 supports increasing rates for on-site, on-call services to utilize the state minimize wage as the base for determining the rate. DODD recently announced its intent also to proceed with increasing and restructuring non-medical transportation rates to enhance community access without cutting existing rates.

ICF/IID Reimbursement

Except as discussed below, HB 166 does not make any changes to the ICF/IID reimbursement formula that was enacted and first implemented in 2018. Rates for July 1, 2019, are being set using the existing formula. We anticipate rates to rise on average, reflecting provider cost increases.

Going forward, HB 166 delays the planned July 1, 2020, implementation of the ICF quality incentive payment system. The bill requires a workgroup, which already has begun meeting, to recommend to the legislature how to reconfigure the quality incentive within statutory parameters. The bill also reduces the percentage of direct care cost used to define the amount of money to be distributed through quality incentive payments from 3.04% to 1%. The remaining 2.04% will continue as the Direct Support Professional Payment (DSPP) portion of the rate. The DSPP previously was slated for elimination when the quality program started. The revised quality incentive system now is to take effect July 1, 2021.

In addition, HB 166 authorizes DODD to create a rate add-on for ICFs to serve specific individuals with severe behavioral challenges. The department anticipates that the add-on will be similar in amount and structure to the existing ventilator add-on. The behavioral add-on will be funded by an increase in the ICF franchise permit fee (bed tax) to the federally prescribed maximum level. HB 166 restructures the bed tax to apply it only to occupied beds, albeit at the higher rate. As before, the ICF reimbursement rate will include the per-day dollar amount of the bed tax, which amounts to $23.95 in State Fiscal Year (SFY) 2020 and $24.89 in SFY 2021.

Other Provisions

There are three other provisions of note in HB 166 that directly affect ID/DD providers.

One provision changes and clarifies the law relating to summary suspensions of a provider’s authority to deliver supported living services to one or more individuals. This language, along with the quality incentive, bed tax, and behavioral add-on items, was negotiated by DODD, OHCA, and other stakeholders during the budget process.

A second provision codifies an individual’s right to choose between ICF and waiver services and establishes certain requirements for DODD and county boards of developmental disabilities to facilitate this choice. The final language adopted by the General Assembly falls short of the requirements advocated by a group of families of individuals in ICFs, but does point in the direction of providing more information to individuals and families about their service options.

The third provision allows ODM to suspend a Medicaid provider agreement when the provider is indicted for certain fraud-related offenses or, significantly, “when the department has evidence that the provider presents a danger of immediate and serious harm to the health, safety, or welfare of medicaid recipients.” These new bases for summary suspensions add to existing language on suspension for credible allegations of fraud. Suspensions under this authority occur without prior notice or an opportunity for hearing, although there are after-the-fact appeal rights.

The bill also omits a little-used provision of previous budget bills allowing DODD to “buy back” ICF beds..

Should you have questions, please contact Pete Van Runkle at OHCA.