January 14, 2014

+

January 14, 2014

Part CFiscal

Overview

+ Overview Objectives

Introductory opportunity Increase understanding of Part C as a coordinated system of services

and financing Background on basis in Law and Regulation Gain national context for financing challenges and state variations View the array of funds states use and how funds are used

Expanding knowledge Broad scan of financing dynamics with structural contexts Specific information highlighting breadth and complexity with potential

areas for further state analysis and exploration

Opportunity for state teams to learn and plan together for strategic structural Part C system financing enhancements

January 2014 Part C Fiscal Overview

+ Overview Outline

Philosophy and Intent of Part C

Statutory and Regulatory Language related to Finance

National and State Context, Trends, and Considerations

Current Part C Financing – Results from the 2012 ITCA Finance Survey

Opportunities for Strategic and Structural Part C System Financing Improvements


+Philosoph

y of

Part C


+Philosophy and Intent of Law

Part C would not be restricted to education/ special education services

Recognizes that all very young children develop and learn in family and community activities.

Established the requirement for family centered services using the typical routines, activities and settings in which families and young children live, learn, work and play


+Philosophy and Intent of Law

First federal legislation to mandate interagency coordination

Part C designed as “glue money” to bring things together for families and eligible children

No erosion of existing mandates establish other funds as “payor of first resort,” (non-supplantation)


+Philosophy and Intent of Law: Programmatic and financial management implications Part C requires a coordinated system of intervention for

families

Services and funding involve multiple federal, state and local entities and crosses traditional agency, department, and professional boundaries

Financing Part C is complex, varies state by state, and must take into account state and local

demographics,

structures and processes,

resources and supports, and

the current political and economic context and trends


+Statutory Language Related to

Finance


+ Statutory Language Related to Finance

Sec. 631 Findings and Policy

Sec. 635 Requirements for a Statewide System

Sec. 637 State Application and Assurance

Sec. 638 Use of Funds

Sec. 640 Payor of Last Resort


+ Statutory Language Related to FinanceSec. 640: Payor of Last Resort

(a) NONSUBSTITUTION- Funds provided under section 643 may not be used to satisfy a financial commitment for services that would have been paid for from another public or private source, including any medical program administered by the Secretary of Defense, but for the enactment of this part, except that whenever considered necessary to prevent a delay in the receipt of appropriate early intervention services by an infant, toddler, or family in a timely fashion, funds provided under section 643 may be used to pay the provider of services pending reimbursement from the agency that has ultimate responsibility for the payment.


+Statutory Language Related to FinanceSec. 640: Payor of Last Resort

(c) REDUCTION OF OTHER BENEFITS- Nothing in

this part shall be construed to permit the State to

reduce medical or other assistance available or to

alter eligibility under title V of the Social Security Act

(relating to maternal and child health) or title XIX of

the Social Security Act (relating to Medicaid for

infants or toddlers with disabilities) within the State.


+Part C Finance Regulations


+ Part C Finance RegulationsSubparts A and B

§303.1 Purpose of the early intervention program for infants and toddlers with disabilities.

§303.120 Lead agency role in supervision, monitoring, funding, interagency coordination, and other responsibilities.


+ Part C Finance RegulationsSubpart C

§303.203 Statewide system and description of services.

§303.207 Availability of resources.

§303.225 Prohibition against supplanting; indirect costs.




(a) Each application must provide satisfactory assurance that the Federal funds made available under section 643 of the Act to the State:(1) Will not be commingled with State funds; and

(2) Will be used so as to supplement the level of State and local funds expended for infants and toddlers with disabilities and their families and in no case to supplant those State and local funds.




(b)To meet the requirement in paragraph (a) of this section, the total amount of State and local funds budgeted for expenditures in the current fiscal year for early intervention services for children eligible under this part and their families must be at least equal to the total amount of State and local funds actually expended for early intervention services for these children and their families in the most recent preceding fiscal year for which the information is available.

Allowance may be made for—(1) A decrease in the number of infants and toddlers who are eligible to receive early intervention services under this part; and

(2) Unusually large amounts of funds expended for such long-term purposes as the acquisition of equipment and the construction of facilities.


+ Part C Finance RegulationsSubparts D and E

§303.344 Content of an IFSP.(d) Early intervention services. (1) The IFSP must include a statement of the specific early intervention services … including -

(iv) The payment arrangements, if any.

§303.420 Parental consent and ability to decline services. (a)The lead agency must ensure parental consent is obtained before—

(4) Public benefits or insurance or private insurance is used if such consent is required under §303.520; (5) Disclosure of personally identifiable information consistent with §303.414


+ Part C Finance RegulationsSubpart F

§303.500 Use of funds, payor of last resort, and system of payments.

§303.510 Payor of last resort.

§303.520 Policies related to use of public benefits or insurance or private insurance to pay for Part C services.

§303.521 System of payments and fees.


+National and State Context, Trends, and Considerations


+ National and State Context: Challenges(reported from ITCA 2012 State Challenges and Responses)

Increased costs of the Part C system Program growth rate (screening and referral initiatives)

Increased costs of children with complex needs State budget availability

In the 2012 survey fourteen states indicated they faced a deficit in the current fiscal year – several others indicated it was too early to tell


+ Context: Responses to Challenges(from ITCA 2012 State Challenges and Responses)

Increase use of family resources increased family fees and required families to use their private insurance or be placed on a fee schedule

Indirectly impacting service delivery reduced provider reimbursement -- some providers

decline to continue because of fiscal constraints Positions left vacant

Changes in service delivery required prior approval for hours of service that exceed an identified

amount narrowed eligibility


+National Context: Part C System Funding2004 and 2012 compared


+National and State ContextState structural differences

State Lead Agency Health, 26 states Education, 13 states Other (e.g. Rehab, Children’s) 17 states

Common State Part C structures and payment implications Individual providers often includes fee for service Comprehensive (program) providers often includes cost

reimbursement or up front payments Regional Local/District Administration mixed payment systems



+Context: State Structural Differences:Considerations in Resource Expansion

Context: State Structural Differences:Considerations in Resource Expansion

Location of capacity and infrastructure to access, distribute, manage, and monitor the methods of finance

Which organization, at what level, accesses resources?

Where is eligibility for resources determined?

How are the resource funds accessed?

How is the funding distributed to providers?

Who reports expenditures and uses?

How are financial incentives and management controls impacting decisions at the provider levels?


+Context: State Population Differences:Considerations in Resource Expansion


+


Context: State Structural Differences:Considerations of Capacity

State systems require infrastructure to support the documentation and ongoing monitoring of the fiscal system Mechanisms to establish and adjust rates or allocations Mechanism for payment Contracts Vouchers Central Finance Data System Evaluation Methodologies

+Context: State DifferencesConsiderations of Capacity

Maintaining dynamic finance systems require ongoing monitoring and adjustments based on the environment

Changing demographics Changing funding levels and financing methodologies in

interdependent systems Changing political and economic context Changing partnerships and new interagency agreements New funding sources Revised policies Better support and guidance More state funding


Structure for Developing and Sustaining a Part C Finance System

Demographic information about the population of Part C eligible children in the state:What proportions of children are likely to be eligible for which sources of funds?Where are they in the state?

Information about possible fiscal resources:Requirements?What can each pay for? Who is eligible?

Design a finance and data system based on the demographics, political and economic context of the state

Existing and potential political and economic context in the state:Traditional, current uses of funds?Existing resources?Competing priorities?Anticipated political changes?

Necessary agreements, negotiations, applications for use of funds: MOUs? Waivers?

Infrastructure to support the documentation of use of funds and/or billing

• Development of policies and procedures for accessing resources and supports and/or billing •Development of guidance and provision of ongoing support for localities and service providers in implementing policies and procedures

Ongoing monitoring:•Changing demographics?•Changing political and economic context?•Need new interagency agreements?•New funding sources?•Revised policies? •Better support and guidance?•More state funding?•Narrower Part C eligibility criteria?

Est

abli

shin

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+ Context: Evolving opportunities

Data systems – increased state and national data States have data and able to analyze current funding Able to project demographic, service needs, and financial requirements

Changes in systems funding Part C Medicaid structure changes

Managed Care and Accountable Care Increased focus on care coordination, cost containment, improve outcomes

Opportunities for access to insurance Increasing numbers of children with insurance coverage Increased coverage for habilitation Increased coverage for services to children with Autism

Shifts in use of other funds (e.g. TANF)

Opportunities for coordination and funding integration. Increases in funding for early education and prevention services to infants and toddlers


+State Financing of Part C Systems Results 2012 ITCA Finance Survey


+ ITCA Finance Survey

Background:

Annual Performance Report (2004, 2005)

Surveys 2010 and 2012

Survey Monkey format

Survey Distributed to all 56 states and jurisdictions


+ ITCA Finance SurveyData source and Limitations


+ ITCA Finance Survey State Identification of Funds


+ ITCA Finance Survey Key Findings: System Funding

62% of survey respondents unable to provide total revenue for each fund source Influence of state structure Cost of resources to collect, report, and track

Over $3.5 billion in identified revenue 2004: $1.5B 2005: $2.3B 2010: $3.0B

Total Federal Share was 38% as compared to 53% in 2004


+ ITCA Finance Survey Key Findings: System Funding

Based on data provided:27% of revenue provide by State line item

24% of revenue provided by Medicaid

19% of revenue provided by State general funds

12% of revenue provided by Federal Part C

7% of revenue provided by local government funding


+ITCA Finance Survey Key Findings: Sources of Revenue Identified by StatesTotal: ~ $3.5 bn


+ ITCA Finance Survey Key Findings: System FundingStates by Federal Part C grant % of Total Budget


+ITCA Finance Survey Part C System FundingFund Sources Used by Multiple States

Federal State Local

Part C State Part C Local Education Agency

PART B 619 State General Funds Foundations

Part B 611 Title V State Special Fundraising

Medicaid CSHCN State Local Government

SCHIP State Special Ed Cash Donations

Title V Tobacco Funds United Way

Champus / Tricare Deaf Blind Schools HMO/Managed Care

WIC State DD Funds Private Insurance

Early Head Start State Mental Health Family Fees

TANF


+ITCA Finance Survey - System Funding% of States using Funds Compared to % of National System Funded by Source


+ITCA Finance Survey - System Funding% of National System Funding Compared to Highest % of a State’s System


+ ITCA Finance Survey Part C Infrastructure FundingNumber of Funds Used by States

Federal State Local TotalState Personnel 7 6 2 15Regional 4 6 2 12Local Personnel 8 7 10 25SICC 4 3 2 9Child Find Public Awareness 11 5 9 25Eligibility Determination 10 7 11 28Comprehensive System of Personnel Development 6 4 2 12Monitoring 7 5 3 15Dispute Resolution 6 3 2 11Data System 5 4 3 12IFSP Development 8 7 11 26


+ITCA Finance Survey Part C Direct Services Funding Number of Funds Used by States

Federal State Local Total

Assistive Technology 9 10 10 29

Audiology 11 8 10 29

Family Training & Counseling 9 7 10 26

Health 9 6 10 25

Medical 10 7 10 27

Nursing 8 8 10 26

Nutrition 9 7 9 25

Occupational Therapy 9 7 10 26

Physical Therapy 9 7 10 26

Psychological Services 9 7 10 26

Service Coordination 8 6 10 24

Special Instruction 7 7 10 24

Speech Language Pathology 9 8 10 27

Sign and Cued Language 9 7 10 26

Social Work 7 7 10 24

Transportation 8 6 10 24

Vision 10 8 10 28

Respite 6 7 10 23


+ITCA Finance Survey - System FundingNumber of States Using Funds by Lead Agency


+ITCA Finance Survey - System FundingStates with Family Cost Participation


+ITCA Finance Survey - System FundingStates by Insurance % (Public and Private) of Total Budget


+Opportunities for Financing Part C Early Intervention Systems


+ Opportunities for Financing Part C Early Intervention Systems

States’ access to data is increasing knowledge of: populations served, services provided, and funding resources accessed and used

National comparisons of funding and structural information facilitate state assessments of potential funding sources.

Changes in public and private insurance coverage and systems may offer opportunities for new Part C system roles and relationships.

Strategic funding initiatives include assessments of Federal and State laws and regulations, state structures, capacities, and trends.


+ Opportunities for Financing Part C Early Intervention Systems

Engage and develop interagency relationships and teams (ICC and others)

Identify and analyze state information and resources

Participate in future webinars in this seriesShare available resources on the web Access technical assistance


Thank you for your attention!This is the first of four webinars in a series on Part C Finance presented in 2014. Resources related to this call and other calls in the series are available at the following URL:

http://ectacenter.org/~calls/2014/financepartc/financepartc.asp

http://ectacenter.org/~calls/2014/financepartc/financepartc.asp

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January 14, 2014

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