Colorado Legislative Council Staff

Room 029 State Capitol, Denver, CO 80203-1784 (303) 866-3521 FAX: 866-3855 TDD: 866-3472

Pursuant to section 24-72-202(6.5)(b), research memoranda and other final products of Legislative Council Staff research that are not related to proposed or pending legislation are considered public records and are subject to public inspection. If you think additional research is required and this memorandum is not a final product, please call the Legislative Council Librarian at (303) 866-4011 by July 19, 2007.

July 12, 2007


Members of the Interim Committee to Study Long-term Care Services and Supports for Persons with Developmental Disabilities Elizabeth Burger, Research Associate II, 303-866-6272 Jessika Shipley, Senior Research Assistant, 303-866-3528 Kelly Stapleton, Senior Research Assistant, 303-866-4789 Amy Larsen, Senior Fiscal Analyst, 303-866-3488 Overview of the System of Long-term Care for Persons with Developmental Disabilities in Colorado



This memorandum provides an overview of Colorado's system of long-term care for persons with developmental disabilities. Specifically, this memorandum discusses the administration of services and describes the services that are provided. In addition, the memorandum describes current funding for services in the state and discusses the waiting lists for services. Finally, the memorandum provides estimates of the funding required to eliminate the waiting lists for services, and describes issues related to the restructuring of Medicaid waivers used to provide services to persons with developmental disabilities.

Definition of Developmental Disability State statute defines a developmental disability as a disability that is manifested before the person reaches 22 years of age which constitutes a substantial disability to the affected individual. In addition, the disability must be attributable to mental retardation or related conditions which include cerebral palsy, epilepsy, autism, or other neurological conditions when such conditions result in impairment of general intellectual functioning or adaptive behavior similar to that of a person with mental retardation.

Administration of Services The Division of Developmental Disabilities within the Department of Human Services oversees the administration of services for persons with developmental disabilities. Because the vast majority of state services for persons with developmental disabilities are funded through the state Medicaid program, the state Department of Health Care Policy and Financing also oversees and administers services for persons with developmental disabilities. Community Centered Boards (CCBs). In Colorado, persons with a developmental disability access services through a Community Centered Board (CCB). There are 20 CCBs in Colorado. Community Centered Boards are private entities which, as designated by statute: • • • • are authorized to determine the eligibility for services of persons with developmental disabilities who live in a specific geographic region; provide case management services to persons with developmental disabilities; serve as the single point of entry for persons to receive state- and federally-funded services and supports; and provide authorized services and supports to persons with developmental disabilities either directly or by purchasing services and supports from service agencies.

Eligibility for Services Any person may request an evaluation to determine whether that person has a developmental disability and is eligible for services. Community Centered Boards are responsible for determining whether the person is eligible for services. If the CCB determines the person is eligible for services, within 30 days of the eligibility determination, the CCB must develop an individualized plan for the individual. The individualized plan must identify: • • • • the needs of the person or family receiving services; the specific services and supports appropriate to meet those needs; the projected date for initiation of services and supports; and the anticipated results to be achieved by receiving the services and supports.

The individualized plan must be reviewed at least annually and modified as necessary or appropriate. Services Provided Services for those individuals who qualify are provided through four main programs: • • • • Adult Comprehensive Services (Comp); Supported Living Services (SLS); Children's Extensive Support (CES); and Family Support Services (Family Support).


Below is a description of each program, who is eligible, and what services are provided. Adult Comprehensive Services (Comp). Comprehensive services are provided to adult individuals with a developmental disability who are living outside their family home and require 24-hour supervision and residential services. To be eligible, one must be at least 18 years old, have a developmental disability, and require extensive support services to live safely outside the home. Some services included in this program are: • • • • • • • • residential habilitation with 24 hour supervision; day habilitation services including supported employment services, access to typical community life activities, and generalized skill development; training and habilitation services in the areas of personal, physical, mental, and social development; transportation; specialized medical equipment and supplies, such as wheelchairs, wheelchair adaptation, van adaptation, or toys or computers that aid in communication; skilled nursing; behavioral services and mental health services; and dental and vision services.

Some services take place within the community setting, while others take place in segregated sheltered workshops or training centers where the majority of people may have a disability. Supported Living Services (SLS). Supported Living Services are services and supports to assist persons with developmental disabilities to live in the their own home, apartment, family home, or rental unit that qualifies as an SLS setting. Supported Living Services are provided as an alternative to institutional placement for individuals with developmental disabilities, but are not intended to provide 24-hour supervision like Comp services. To be eligible, one must either live independently with limited supports or already receive services from other resources such as family members. Services include: • • • • • • specialized medical equipment and supplies; counseling and therapeutic services; dental, hearing, and vision services; day habilitation services including physical, occupational, or speech therapy; home modification; personal assistance services including assistance with bathing, personal hygiene, eating, dressing, grooming, relief to family members who normally provide personal care, and medications; communication services such as speech/language therapy; counseling services including individual, group, behavioral interventions, diagnostic evaluations, occupational, and physical therapy; transportation; and assistance with employment (pre-vocational and supported employment).

• • • •


Children's Extensive Support Services (CES). Children's Extensive Support Services are provided to children who have a developmental disability, or to children under the age of five who are at risk of a developmental disability or developmental delay. To be eligible, one must have intensive behavioral or medical needs. Children's Extensive Support Services are provided as an alternative to institutional placement for children with developmental disabilities. Services include: • • • • • • • personal assistance services including assistance with bathing, personal hygiene, eating, dressing, grooming, and medications; child care assistance; professional services such as counseling and therapeutic services; household services such as housekeeping tasks; home modification services such as adaptation of showers or toilets and making the home accessible with ramps or railings; community connection services such as providing for recreational equipment; and specialized medical equipment and supplies including wheelchairs, wheelchair adaptation, van adaptation, or toys or computers that aid in communication.

Family Support Services. Family Support Services are intended to provide services to allow children and adults with developmental disabilities to remain in their family home and to provide support to families as the primary care givers. Referrals to the Family Support program are made through CCBs. Those eligible are required to have a family member with a developmental disability living in the household. Eligibility for the Family Support Services program does not necessarily guarantee services or support. The Family Support program is not funded through a Medicaid waiver, but is funded with state dollars. A family support plan is developed in conjunction with an individual's Individual Plan in order to avoid duplicative services. Services may include: • • • • • • • • • • family support grants; support service coordination and educational materials; emergency and outreach services; reimbursement for medical and dental expenses not covered by health insurance programs; child care; mobility aids and adaptive equipment; therapy and family counseling; recreation and leisure needs; transportation; and special dieting foods, clothing, and homemaker services.

Current Funding and Waiting Lists The vast majority of services for persons with developmental disabilities are funded through federal Medicaid waivers for home- and community-based services. These Medicaid waivers enable the state to support services for persons with developmental disabilities using Medicaid funds that –4–

originate as 50 percent General Fund and 50 percent federal funds. However, waiver services differ from other parts of the state Medicaid program in that the state may limit the total number of program participants. As a result, there are waiting lists for services. Table I reflects FY 2007-08 funding and waiting list information. Adult Comprehensive Services, Adult Supported Living Services, and the Children's Extensive Support programs are funded primarily or entirely by Medicaid with a 50 percent state contribution. For budgetary purposes, program resources are the number of individuals who are expected to receive services for a full year and may vary from the actual number of clients served. Some of the persons on the waiting lists are anticipated to be removed during FY 2007-08 due to the funding of new resources and changing client needs. Family Support Services are primarily funded with state General Fund moneys, and current funding serves about 4,000 families.
Table I FY 2007-08 Funding and Waiting Lists
Avg. Cost per Full Year Resource $66,530 $17,050 $20,720 W aiting List as of April 2007 1,368 2,324 157

Com munity Program Adult Comprehensive Services (Comp) Adult Supported Living Services (SLS) Children's Extensive Support (CES)

Total Funding


Resources Funded b 3,872 3,584 395

$257,604,990 $61,106,767 $8,184,233

Family Support Services $7,269,644 1,176 $6,182 4,178 a) Reflects funding in the Developmental Disability Services, Community Services, Program Costs line item of the FY 2007-08 Long Bill. It does not include 403 adult residential resources at the regional centers or services funded with local dollars. b) Of the resources shown, 78 adult comprehensive resources and 24 adult supported living services are funded for an average of six months in FY 2007-08. These resources are counted as 0.5.

Eliminating the Waiting Lists The waiting lists for developmental disability services are a fundamental problem. While many people anticipated a judicial resolution from a lawsuit alleging that the state's waiting lists for developmental disability services were illegal, the courts ruled in the state's favor allowing the waiting lists to continue.1 The ruling leaves the state with broad flexibility to set funding levels for services to the developmentally disabled.

Mandy R. v. Owens. In February 2005, Judge Richard P. Matsch, the trial court judge for the federal district court, ruled in the state's favor. On September 21, 2006, the 10th Circuit Court of Appeals upheld the ruling.



Services for adults. The projected cost to the state of entirely eliminating the current waiting lists for adult services is estimated at $46.6 million annually. Costs are shared between comprehensive services and supported living services as shown in Table II.
Table II Cost of Eliminating the Current Medicaid Waiting Lists for Services for Adults with Developmental Disabilities
Net State Cost per Client* $29,688 $9,320 Resources Required** 1,094 1,515

Program Adult Comprehensive Services (Comp) Adult Supported Living Services (SLS)

Total State Cost $32,478,672 $14,119,800

Total $39,008 $46,598,472 *Costs are based on FY 2007-08 average net state costs including case management. **Resources required are based on the waiting list as of April 2007, reduced by 20 percent to account for individuals not removed from the wait list in a timely fashion and assuming 344 SLS slots would be opened up by individuals moving to comprehensive services from SLS.

Eliminating the current waiting list would only take care of the problem for one year because the demand for services continues to grow much faster than population growth. Joint Budget Committee staff estimates that growth in demand for comprehensive residential services is about 4.1 percent per year, while growth in the state's population is between 1 and 2 percent per year. The rapid growth is tied, in part, to the baby boom generation cohort of persons with developmental disabilities. This group increasingly requires state-funded services as their parents age and are no longer able to care for them. Joint Budget Committee staff estimates that 180 new resources would need to be added each year in the near future to avoid ongoing waiting list growth. After eliminating the waiting list, an annual increase of about $6 million in state funds is required to avoid recreating it. Services for children. At this time, staff is unable to accurately estimate funding requirements to eliminate the waiting list for the Children's Extensive Support program. Placement delays and problems with the program's ability to spend funds while children are awaiting placement resulted in large under-expenditures going back to FY 2005-06. In FY 2006-07, thirty new Children's Extensive Support resources were added, but under-expenditures topped 30 percent. Joint Budget Committee staff anticipates that an FY 2007-08 budget adjustment, either to increase numbers of children who may be served or to reduce the budget, is likely. While state funding needs may be as high as $1.6 million (157 children x $10,000), at this time, it is unknown how many children would remain on a waiting list after current funding is utilized. Services for families. State funding for Family Support Services is administered much like a block grant in that CCBs receive a set amount of money and that funding is used to provide services to as many families as possible. Thus, any additional funding would be used to enhance and expand services. State funding as high as $24.6 million may be required to provide full services to all families on the waiting list ($5,900 x 4,178 families). However, it is important to note that many of the families on the waiting list are receiving some services. Local funds may also be made available for this program. –6–

Restructuring of Payments for Services Funded through Medicaid Waivers As noted earlier, the vast majority of state services for persons with developmental disabilities are funded through the Medicaid program through various waivers. From the late 1990s through FY 2005-06, the developmental disability system was managed pursuant to a systems change agreement between the Joint Budget Committee and the Department of Human Services. Under the systems change agreement, CCBs received payments based on an average service rate for their individual regions and persons served, and the CCBs negotiated agreements with individual providers based upon the specific needs of the persons served. This quasi-managed care system was eliminated in FY 2006-07 after the federal Centers for Medicare and Medicaid Services (CMS) notified the state that the payment methodology would no longer be permitted. In February of 2006, the state began a process to revamp its billing system for comprehensive and SLS waiver services. As directed by CMS, Colorado must establish clear guidelines for provider rates, develop a process for determining client levels of need, and implement a payment system that allows specific costs to be tied to an individual for all waiver programs. The billing system change has driven a substantial workload for the Department of Human Services, CCBs, and providers. In addition, the transition initially resulted in significant payment delays to providers. Finally, a system developed to "hold harmless" any provider who faced financial losses as a result of the billing system change had technical difficulties and hold harmless payments were not distributed to providers until the spring of 2007. The state is currently in the process of developing uniform tiered rates for residential services and day habilitation services and evaluating all clients to determine their level of need and the appropriate reimbursement tier for their services. An interim rate structure for comprehensive and SLS waiver services was put into place in August of 2006. The final rate structure for comprehensive services was expected to be implemented July 1, 2007, but delays in implementation have pushed back the start date for the new rate structure to sometime in 2008. The final rate structure for SLS waiver services is anticipated to be implemented in FY 2008-09. The change from a quasi-managed care to a fee-for-service payment system for waiver services will have short- and long-term fiscal implications for the state. For instance, in FY 2006-07, the state budgeted over $1.8 million for one-time costs associated with the billing system implementation. In addition, in FY 2006-07, a General Fund expenditure of approximately $7.6 million was incurred to replace local funds that could no longer be accessed under the new billing system. Finally, in FY 2006-07, the new billing system resulted in a one-time underexpenditure of funds for services for individuals with developmental disabilities of approximately $29.8 million. This under-expenditure was due to decreased flexibility of CCBs to administer the funds, as well as the switch to a cash system of accounting for Medicaid-funded waiver services. According to the Joint Budget Committee staff, although the fiscal implications for the state are still uncertain, under the new system, the state's control on overall waiver costs will be far more limited than under the former quasi-managed care system.


S:\LCS\MEMOS\2007\Overview of the Developmental Disabilities System in Colorado7207112658.wpd